In India, borrowing money against a gold deposit is fairly usual. Lenders disburse funds in exchange for the gold that has been given to them as collateral. The money you get can be used for business expenses, medical expenses, or any other financial needs you have without having to rely on someone else.
A gold loan is a secured loan that you can get by pledging gold jewelry to a lender as collateral (bank or NBFC). In exchange, the lender will provide you with a loan sum dependent on the current market value of your gold. Your gold is returned to you after you have fully repaid the loan sum plus interest over your chosen term. You can borrow money by pledging gold ornaments; the purity of the gold determines the amount you can borrow. Banks do not consider gold bars, coins, or bullions as collateral for loans.
When you take the gold to a lender, they will check it for purity and decide how much money you can borrow. According to RBI guidelines, this amount may be up to 75% of the gold's value. Aso the charged processed fee is also required to be paid as per the bank policy.
You run the risk of your gold jewelry being lost or swapped if you use an unlicensed bank or NBFC. This is why it's a good idea to get a gold loan from a reputable lender like PNB Bank. You don't have to think about your gold being safe because it's held in a vault. As a result, you will have more peace of mind knowing that your important possession is secure.
You must submit one passport, as well as one of your identification proofs (passport, driver's license, or Aadhaar card) and proof of address (electricity bills, phone bills). You can use Form 60 if you don't have a PAN passport. By pledging their gold, anyone over the age of 18 may apply for a gold loan. With all of your documents in order, a reputable bank, such as a PNB gold loan per gram, will disburse the loan sum over the counter in just 45 minutes.
PNB bank, for example, provides a range of quick and flexible repayment choices from which you can select based on your preferences and convenience:
• Bullet Repayment: You don't have to pay an EMI when you pay both the principal and interest at the end of the loan term.
• EMIs (Equated Monthly Installments): EMIs (Equated Monthly Installments) are used to repay the loan.
• Overdraft facility: This is a loan that you only pay interest on the amount you use.
Depending on the lender, gold loans typically have a repayment period of six months to two years. For example, PNB Bank offers gold loans with terms ranging from 6 to 24 months. Some lenders can stretch the term of your loan if you renew it. However, this can result in higher interest, resulting in a greater payout.
It's important to know your repayment potential before taking out a gold loan. In the event of default, the lender has the right to sell your gold to recoup the remaining loan balance.
Gold loans are now available from NBFCs and banks all over the world. Although both have a loan-to-value ratio of 75%, here's a fast guide to help you decide which one is right for you.
Even though it is important to obtain correct gold prices before taking out a loan. A person in Panaji, for example, is looking for money in an emergency. As a result, he/she will be choosing the financial institution in Panaji where he/she will obtain the best gold rate in Panaji.
CONCLUSION:
Compared to NBFCs, gold loans from reputable banks have a lower interest rate. PNB Bank also has a quicker processing time; the loan is approved in 45 minutes with minimal paperwork and no secret fees. And, since reputable banks have better protection, you can rest assured that your jewelry will be secure if you take out a loan from one. Gold assurance is a way for banks to create trust with their customers.
If you're looking for a fast way to get money to get you through a cash crunch, gold loans are the most convenient option right now. With gold prices rising, you can be able to get a larger loan for your gold.
Also Read This-Low-Interest Rate ensuring Growth of Gold Loans
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