What Is a Gold Loan?

Introduction-

Gold is one of the precious reserves which is with almost all households in the country. According to some official as well as unofficial surveys, the volume of the gold reserve with Indians is 25000 tonnes and their market value is almost Rs.110 lakh crore. 

Gold loan-

A gold loan is a type of loan which we can avail of after putting gold as collateral. Gold loan is very accessible because it can be availed of even with a low credit score.

Now let’s talk about things associated with the gold loan-

Gold loans are offered by almost all financial banks in India. There is a certain specification that has to be fulfilled before you are applying and apart from that, you need to check all parameters meticulously. Such as gold loan interest rate, gold loan per gram, and norms of banks.

Let’s see some parameters associated with it-

Varying Gold loan interest rate- This is the most important parameter which you need to check very carefully before deciding about the bank for avail of the loan. There are various banks offering interest rates from 7% to 29% For instance, HDFC bank is offering an interest rate of around 8%. You should check first interest rates associated with the gold loan of all the banks. The interest rate is varying actually from bank to bank. Apart from that, It is also varying from region to region. If you are belonging to a rural area you will find many banks which are localized banks and offering a feasible interest rate. For instance, there are so many banks that are localized and offering very feasible interest rates. On the other hand, if you go for a loan in national banks you will surely find a bit higher interest rate but there are many banks with interest rates at par with local banks.

Ease of accessibility- This is the major concern of all people who think to apply for the Gold Loan or Jewellery Loan. There are rural banks that are offering gold loans just on paper. There are some instances from rural areas that people are applying for loans and roaming around banks but not getting the loan approved. You should be very careful about this thing before choosing the bank. Choose that bank that is providing the loans with accessibility. Some banks are offering very lucrative interest rates and ease of accessibility. You should go with those banks.

Security of gold loans- This is the main thing associated with gold. Several people don’t consider the gold loan as their loan option because of the sense of insecurity among them. There have been some instances where people have seen the theft incidence. You should see the past security alertness of the bank.

Documentation- There are some banks whose documentation process is so much complicated. But as we are shifting to the online world, these complications are not prevailing now. To avoid complications, you should prefer an online application process rather than roaming around the bank every day. Some portals are offering online services. This is very easy for anyone and if you are not comfortable with this then you can visit any Jan Seva centers near your locality, they will assist you in this process. Some documents are common for all banks. Check this out-

• UIDAI(Aadhar card)

• PAN card

• Income tax return 

• Form-16

• Credit scorecard

• Income certificate

• Academic certificates

You should arrange these documents with you so that you can use them anytime. Even if it is possible, you may put all the documents in an online folder. At the time of application, you can directly use it.

Conclusion

If you are in urgent need of a loan, you can directly apply for a gold loan after checking all the parameters associated with it. You should visit the bank and check its documentation process and the interest rate offered by the bank. you can then fulfill your essential needs by availing of the gold loan.

Read More:- Less interest rate on Gold Loans

Gold Loan Benefits

 

There are many reasons for which gold is preferred by most people in India. Before moving forward to the reason why the gold loan is much more beneficial than any other form of loan, seeing it is easily available in the country so that it is also available during the urgent situation. First of all the gold If it comes in touch with the human body, it improves the blood circulation along with control infections it also gives benefits for the treatment of skincare. Regulating the temperature of the body, helping the Arthritis treatment, eating any kind of addiction, or controlling the growth of the cancer cells, is having a huge benefit of wearing.

If we add on the first position of benefit is the low Gold Loan interest rate. As gold is easily available with which of the people in India is the reason for which it is used as order security in against getting any kind of loan. As gold is available and people are fond of keeping it at their house or wearing it in the form of the ornaments or keeping it in the form of the coin is the main reason that even if a person sleeping gold for any kind of loan then also gold is not treated as any kind of money or cash but as good luck for which by paying the repayment and due to this mentality Indian people whenever there is gold loan the repayment is above 90%.In the view of both the lender and the buyer, the risk of loss is zero % .

The advantage of the minimum documentation is another beautiful thing about the gold loan.

For example, if a person is traveling from one place to another and he needs an emergency forgetting of financial or monetary health. He is having gold with him in the form of the gold chain and wants to avail loan then can surely do that in the way of apply gold loan online within a few hours along with the dispersal of the loan amount into the bank account only with the proof of address and proof of Identity. This has been in the case of the other types of loan as that of the personal loan on the educational loan then the process was too complex for the documentation which would have not been possible for getting the amount.

Processing fees are one of the charges which are charged by the banks and NBFC to give the service on behalf of the customers. Gold loan is a very simple procedure where only the valuation of the gold is done in which there is no other any Complex situation or process which is followed. That the processing fees have been kept lowest among all the types of the loans.

The Other advantage of the Gold loan is that there is the availability of the foreclosure of the loan not only the foreclosure of the loan but also if there is any kind of penalty or charge for which the loans will be foreclosed then also there is the application of the waiver system has been done to give some relief to the customers or the borrowers. There is too much flexibility repayment tenure of the gold loan. Flexibility is from 6 months to 24 months.

Conclusion

For example, if somebody's income is average and he needs much more time as compared to a person who is having much more income and who can pay within a short period, then there is an answer of yes for those people who are wanting any flexibility for getting much more time to repay the loan. Due to this reason, different types of flexibility in the loan repayment schemes have already been done. Scheme of bullet payment as well as normal installment payment system and taking the interest of front while the principal amount at the end of the tenure.

Must Read:- Novice manual for Gold credit