These asset-backed credit facilities are available for salaried employees as well as self-employed professionals or entities. The reason why the demand for gold loans is taking leaps, especially in India is because of the continually increasing gold prices and the nature of gold as collateral. As it is very easy to keep gold as security and when one successfully repays the EMI’s, then he/she can take back their asset. This yellow metal is a highly liquid asset, and the rates of gold seldom fall. Most of the time, the rates of this asset soar suddenly and increase its value even further.
The loan amount that the financial institution sanctions depends on the current market value of the gold, purity of asset, and loan-to-value ratios prevailing in that particular institution. The loan-to-value ratio determines the part of the value of this yellow metal that will be sanctioned and disbursed as the loan amount.
Usually, this ratio is 70 to 80 percent of the current market value of the collateral pledged by the borrowing individual or entity. These ratios may vary and can be different for banks and non-banking financial companies. Recently this ratio has been further relaxed and increased up to 90%. Muthoot Finance Gold Loan policy provides a loan-to-value ratio of 75%.
What if the amount of loan sanctioned by the lending institutions (banks and non-banking financial companies) falls short in covering up for the cash needs of the borrowing individual or entity?
For these unforeseen situations, the financial organizations (banks and non-banking financial companies) have the facility of top-up on a gold loan. A top-up gold loan amount is provided over and above the loan amount that was initially sanctioned. It is just like the top-up recharge people have for their mobile phones.
It will be easier for the borrowing individual or entity to apply for a top-up if they are already connected with the lending institution (bank or non-banking financial companies) or have an account with the institution.
Anyone who has a gold loan can enjoy this facility after a considerable amount of time has passed after the gold loan disbursement. Getting another credit facility or going through a long and exhausting procedure all over again with the lender can be a very time-consuming and expensive affair.
For pre-approved customers, the Bank Of India gold loan calculator has an option of top-up gold loans. Top-up gold loans have attractive interest rates, and for repayment, the primary loan’s installments can be clubbed with the top-up personal loans payment. The installments paid together will make it easier for the borrowing individual or entity to settle the additional debt taken from the lender. The process for top-ups is similar to that of getting a new gold loan but with lesser documentation.
Requirements can occur at any point in time without giving a fair warning to the individuals. In such a case, the borrowing individual or entity can rely on their financial organizations to get extra funds whenever and wherever needed. The institutions also provide the feature of using the gold loan calculator so that the borrower can understand the implications of the decision they are taking.
The gold loans are not at all complicated when looked at thoroughly. They have terms and conditions simplified for the sole purpose of a better understanding of the borrowers, and they provide paramount comfort to the individuals and entities that require monetary assistance. This facility is extended at the earliest without causing any nuisance for the borrowers.
Must read:- Commonly asked questions regarding Gold Loans
No comments:
Post a Comment