NO COLLATERAL PERSONAL LOAN

A collateral is a form of security given by a borrower to the lending financial institution (bank or non-banking financial companies). The borrower can pledge any asset and get a certain amount of money as a loan. The lending institutions demand collateral because of the risk of default they perceive while granting the loan amount. It is very difficult to find an asset which is good enough in quality and quantity. The asset to be given as a collateral has to be as per the norms of the lending financial institution  (bank or non-banking financial companies). The borrowers can not pass on anything they want to. The lenders have some specifications. When in need of funds, finding security worth pledging can be a lengthy task. Not everyone is well equipped with the resources and time required to do so. A borrower can always rely on personal loans in such a scenario.

A personal loan is a collateral-free loan i.e no security required to get funds. A personal loan is readily available for those who meet the eligibility criteria of age and income. The minimum age required is 21years and the minimum limit of income varies depending on the lending institution (bank or non-banking financial companies). The source of income of a borrower must be stable and the employment history should be as clean as a whistle. There is a myth among the borrowers that an unsecured loan is generally accompanied by tremendously high-interest rates. The personal loan interest rates are not as high as what people consider it to be. It is merely high when compared to secured loans and is lower in comparison to other forms of credit. A lending financial institution (bank or non-banking financial companies) when giving a loan without collateral considers the credit score of the individual or entity. The credit score is a three-digit summary of the credit history of the borrower. The range of this score starts from 300 and goes up to 900. A higher score implies that the borrower has not made any delay or default in payment of credit taken in the past and this means the lender does not have to worry about the borrowers making defaults in the future. A low score can have an unpleasant impression but the individual won’t be given a cold shoulder. They can also apply for a personal loan but with a co-applicant. A credit score is a crucial factor on which the decision of the lending financial institution depends. 

HDFC personal loan policy comes with paramount importance for the convenience of borrowers. No complex procedures or hefty paperwork required. The personal loan interest rates that are levied under the HDFC personal loan policy start from a nominal rate of 10.75% per annum.

With a personal loan, the borrower will have the option of providing security. In case a borrower does not have collateral the loan can be availed without it, and if the borrower wants to pledge collateral then the loan can be given against the value of the collateral. It is entirely the decision of the borrowing individual or entity.

Must Read-Can a co-borrower increase personal loan eligibility?

Are housewives eligible to avail a gold loan?

If you are a housewife or a homemaker and you own any gold ornaments then you are eligible to take gold loans. The only eligibility criteria for a gold loan are that the age of the person should be 18 or above and that you should own gold ornaments of at least 18k purity. Anything higher than 18k will fetch you better gold loan per gram rates, and anything lower than that will make you ineligible. There are many lending institutions out there that can offer you lower gold loan interest rates. You can ask for gold loans to meet the financial requirements for your own business or need money for any other financial problem.

The main concern for the lenders will be the lack of a regular source of income for the housewives. This puts funds at risk of failure of reimbursement. The solution to this issue is getting a guarantor. A guarantor is a person who takes the responsibility of repaying the loan in case the borrower fails to do so. The guarantor’s credit score and history should be good, else the application might be rejected.  

There are many schemes launched by the government to improve the status of women in society by providing them with various types of loans including gold loans and motivating them to start their own businesses. There are many banks and financial institutions that provide loans to women who are eligible and own gold articles.

Some gold loan schemes started by the government of India include Star Mahila Gold Loan Scheme which helps non-working women, housewives, or homemakers to purchase gold ornaments or jewelry. Another such scheme is known as the Pradhan Mantri Mudra Yojana For Women which helps and encourages women in India by providing them with loans so that they can fulfill their financial needs with the money or start up their own business. Under this scheme, women can get a minimum loan amount of INR 50,000 and a maximum loan amount of INR 50 lakhs so that they can start a new business on their own. Security as collateral ( i.e. gold ornaments) has to be pledged if you want a loan of more than INR 10 lakhs, but a collateral-free loan is provided for up to INR 10 lakhs.

Being a housewife and looking for gold loans to meet financial needs isn’t a difficult thing. You just need to beware of the gold loan frauds and only avail the loans from reputed lending organizations. ICICI gold loan schemes are a safe way to avail of the loan. You get the assurance of the reputed bank.

Also read this: Need cash urgently? get a gold loan

Understanding your gold loan repayment better

A gold loan is a type of secured personal loan where you pledge your gold items to the bank, NBFC, or any other lender in exchange for money. It is a type of loan where you transfer the possession of your gold to a bank or a lender in exchange for money for a specified period of time. The loan amount that you get in exchange for your items is usually 70-75% of the gold’s value which means the bank holds on to a certain amount just in case you are unable to pay the loan back. Gold loans are usually short-term loans where the loan is repaid within 3 months to a year.

How can you repay the loan?

You can repay the loan in EMIs or you can also pay the full amount with gold loan interest at once. You also have the option of paying the interest amount upfront and then repay the loan amount at the end of the loan tenure. The loan period is usually 3-12 months.

The period of repayment cannot exceed two and a half years which means that the loan has to be paid within 30 months. Some lenders give an extra 6 months grace period and let you repay the loan in 36 months.

You can renew your gold loan on request and that will extend your period of repayment. Your lender may ask you to pay renewal charges based on the loan amount and stamp duty as per the law.

Since a gold loan is a short-term loan, one should

d be able to repay the loan within the tenure. Failing to do so will result in you losing your pledged gold to the bank or lender. The lender reserves every right to sell your gold in order to recover the loan amount in case you fail to repay the loan.

Gold has been a convenient way to avail loans from very ancient days. It is still the most secure way of getting the loans within a short span of time. There are many lending institutions in the market. SBI gold loan schemes are some of the most popular options to get hassle-free loans at lower gold loan interest rates.

Also Read:- Things to do with the gold loan