Gold Loan The Last Resort

A gold loan is a very secured loan if we compare it to different loans. There are some benefits while applying for this gold loan like a low rate of interest, very fast processing, and so many benefits of this gold loan.

What is a gold loan?

This gold loan is very secured. Nowadays, this gold loan can also be applied online through banks or NBFCs. you will have to also visit your lender at least once to deposit your gold articles. Once this is done, then you can register yourself at the lender’s customer portal or mobile application and link your bank account. So when you need money very urgently, you can also apply for this gold loan and get the available credit disbursed in your bank account anytime and anywhere in a very few minutes.

There are some benefits while applying for a gold loan.

• The credit score is not required – Unlike many loans, this gold loan approval does not depend on your credit score. In any case of other loans, the loan amount is also given based on the repayment capacity and credit history.

• Very faster processing – Gold loans are more secured loans and thus include lenient eligibility criteria and very little documentation. This does not even require a credit score for gold loan approvals. And therefore, most of the lenders generally disburse the gold loan just a few times. Many people who are eligible for an online gold loan can even get the gold loan amount in fewer minutes.

• No processing fees – Most of the banks and NBFCs levy zero processing fees on these gold loans. 

• Very low rate of interest – As compared to unsecured loans this gold loan, which is a very secured loan, charges a very low interest rate. Also, if you also attach another asset as collateral.

Gold loan calculator

You can also determine how much loan you are eligible for by using this gold loan calculator tool that is always available on the website of most of the lenders and third-party websites. You just need to only enter the weight of your gold ornaments or jewelry and the tool will also calculate and display the gold loan amount you are eligible for. Most of the lenders may ask you to enter the type of gold, repayment tenure, and some other things.

Gold loan City Union Bank

This City Union Bank is the best bank for gold loans. Life is full of worries and fears. Subsequently, you may also need cash to fight financial problems in your life. In this case, you can also get a gold loan from this City Union Bank Gold Loan to fight the economic emergency. The gold loan is a very safe loan and a very secured loan. After, the people with also reduced CIBIL score can also simply apply for this service.

Also read this: Reasons why Gold Loan ranking over a Personal Loan

Essentials Of Gold Loan

Gold prices are touching record highs. India has one of the largest markets for gold. Many customers who have their golds in vaults are considering going in for gold loans to meet their requirements. Getting a gold loan is an easy and hassle-free process. Gold loans are processed faster compared to other loans, it also has a lower rate of interest when compared to personal loans. One of the Banks providing a
City Union bank gold loan.

Features of Gold loan:

• The minimum loan amount starts at Rs. 5000/-

• The maximum loan you can get from City Union bank is 5 Lakhs.

• Gold loan tenure up to 12 months.

Characteristics: 

The lending institution (banks and non-banking financial companies), in this case, City Union bank verifies the gold ownership and identity documents these documents are also known as LTV or Loan To Value. A credit limit similar to a bank overdraft account is given, the limit is 75% of the market value of the gold. The LTV (loan to value) is capped by the RBI, this particular amount can be withdrawn by the customer when they please.

On repayment of the loan, the customer can repledge the same gold for future needs (loans). Customers, the borrowing individual or entity, can also choose to make bullet installments instead of EMI’s (equated monthly installments) which in other words a lump sum payment made for the entire outstanding amount, this is usually done at maturity of the gold loan. There is no limit as to how many times the customer can pledge the gold.

The gold loan Interest rate for a gold loan is MCLR +4.75. This rate can vary depending on the quality and quantity of the yellow metal pledged. 

The gold loan amount per gram is between Rs. 1755 - 2145 and is subjected to change based on market rates and purity of gold. This makes all the difference in the requirements and the cost to get this credit facility. The banks and non-banking financial companies provide a gold loan with minimal documentation, they also have a secure storage facility for your precious yellow metal.

A gold loan or a loan against gold is given in place of the gold so if your gold is authentic, you don’t need anything else such as a good credit score or a salary slip, you can easily avail the loan without any hassle. The requirements are simple and basic but essential. This credit facility is one of the most convenient facilities that an individual or entity can get from the credit market.

Some banks allow partial payments and early repayments without any penalties. You can also call this an overdraft facility offered to customers whenever needed.

Also read:- How to take a gold loan? here are some tips for you

Gold Loan Over Others

Gold loans are quick and easy to get financial aid without striving for it for long. The borrowing individual or entity looking for easy financing can apply for this loan at an affordable gold loan interest rate. Whether it is fr an urgent situation or an impromptu expenditure, this credit facility has got everything covered. Keeping the gold ornaments and object idle in a locker makes a precious asset like gold an unproductive asset. The value of gold continuously increases with some downfalls every once in a while but has an upward trend. The valuable asset of gold can be put to use by pledging it, and the funds obtained against it can be used to settle their financial needs. 

The credit against the yellow metal is a secured form of loan granted by the financial organizations (banks and non-banking financial companies). Don't worry! The lending financial organization will keep the asset safe and sound in a locker and release it as soon as the entire credit amount is settled. 

For short and medium tenure, this credit facility will be the best. The reasons why this facility is preferred over other credit forms are as follows:

• The gold loan interest rate is comparatively lower, making this facility within the borrowing individual or entity's reach. 
• The tenure can be flexible and be from a few days to a few years. The borrowers can select a term of their convenience. 
• Most of the lending institutions offer the amount based on the value of gold.
• The autonomy of the funds is with the borrowing individual or entity. The lending institutions do not require the borrowers to specify the reason for borrowing funds. 
• The eligibility criteria and documents required are minimal. 
• Unlike other loan facilities, the credit score is not a matter of concern over here. 
• The process is short and straightforward. The borrowers do not have to endure the lengthy and torturous procedure.
• The disbursement is quick and smooth. The funds can be credited within a few hours if the procedure is conducted without any interruptions. 
• The facility can be obtained online without paying a visit to a lending organization (banks and non-banking financial companies).

The points specified earlier are some of the reasons and the benefits that a borrowing individual or entity gets if they avail of a gold loan. City Union bank gold loan are the facilities extended through offline as well as online mode. The lending institutions advance this facility to the borrowing individual or entity with paramount importance for their comfort and ease of access. Loans against gold are one of the best ways to satisfy any financial need that an individual or entity might encounter at any point in time.

Also Read:- This is the fastest way to get Gold Loan

Hidden charges in Gold Loans

 

A gold loan or the loan against gold is one of the most useful and economical credit tools that can be used to avail of quick funds with minimal documentation and an affordable cost.

The major part of the cost is usually the gold loan interest rate, but many times there are certain extra costs attached to the loan facility.

Some costs are the following such as:-

•  Processing fees-

Financial organizations (banks and non-banking financial companies) endure the administration costs to assess the application and evaluate the collateral. The lender spends a lot of time and effort, deploying their resources while sanctioning the gold loan. The processing charge is charged on the total credit amount sanctioned disbursed. 

• Inspection and documentation charges-

The lending organization (banks and non-banking financial companies) goes through the documents to confirm if the borrower is qualified and has the repayment capacity. For the gold object pledged, the lender sometimes has to call in an expert / professional to verify the collateral's quality and quantity. For that, they incur some expenses, and these expenses will be recovered from the borrowing individual or entity. As far as documents are concerned, they are primary KYC documents, and thus, for the papers, not many expenses are incurred, the amount is nominal. 

• Late payment charges-

Some financial organizations (banks and non-banking financial companies) charge modest fees from the borrowing individual or entity when they make delays in the payment of personal loan amounts. In case the borrowing individual or entity pays after the specified date per the agreement, the lender will charge this penalty. 

•  Preclosure charges-

Suppose a borrower has an overabundance of funds and can foreclose the loan by paying the entire amount of the gold loan before the tenure expires. In that case, the lending organizations (banks and non-banking financial companies) charge a fee for their lost interest revenue and recover in the form of a pre-closure fee. Under City Union bank gold loan policy, the individual or entity has to pay a small fee for preclosure. 

 

• Counterfeit statement charges-

If a borrower requires a duplicate statement of the payment schedule or any other related information, the financial institutions charge fees and provide the borrower with the required detail. 

• Goods and Services Tax (GST)-

The Goods and Services Tax is charged for the borrower's services, including both regular and additional, during the application process. Unlike other fees, this will be charged irrespective of the choice of the borrowers. 

The costs mentioned and discussed above are elective, except for the goods and services tax. It means that many lenders do not levy these charges, but as a borrower, an individual or entity should go through it sincerely and acknowledge it. Though in a gold loan, these costs are almost negligible. These costs are calculated on the total loan amount and can have a massive impact on the borrower's liability. 

Read More:- How Gold Loan Influences Your CIBIL Credit Score?