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Gold Loan

 Gold Loan Interest Rate Lowest gold loan interest rate starting from 8.96%
 Gold Loan LTV (Loan To Value) Up to 75% of the value of the gold
 Pre-Payment Charges  Ranges from 1% to 5% of the outstanding loan amount
 Processing Fee Up to 2% of the loan amount
 Gold Loan Turnaround Period Ranges from a few minutes to an hour
 Gold Loan Tenor Ranges from a week to 5 years
 Documentation  Photographs and KYC of the applicant
 Guarantor No Guarantor Required
 Gold Deposit with the Lender Yes, a borrower has to deposit the gold with the lender

 

What is a Gold Loan?

Gold Loan is a secured form of loan in which the borrower has to pledge gold ornaments or gold coins as collateral with the lender. However, the loan against gold depends on the value of the gold offered for mortgage. The loan obtained should be repaid in installments along with the fixed rate of interest charged by the lender. Usually Gold Loan is offered for short to medium tenor. Gold loan is one of the good options for instant liquidity that could be used for several personal and professional needs including wedding expenses, educational expense, business expansion, and others.

Unlike the other secured loans Gold Loans are not offered on the basis of the credit history or the repayment track on the past loans and credit card bill dues. The gold loan is offered based on the value of gold pledged as collateral. However, CIBIL Score will still be checked by the lender.

 

Key facts about gold loans

To know more about the gold loans refer to all the key facts explained below:

  • Loan Amount: The borrower can borrow minimum of Rs. 1,000 as gold loan. However, the amount of loan entirely depends on the value of the gold pledged as collateral with the lender.
  • Shorter Loan Tenor: Gold loan is offered for the short tenor that ranges from 6 months to 5 years.
  • Fixed Rate of Interest: The lending institution charges a fixed rate of interest on the Gold Loans. The prevailing gold loan rate of interest is 8.96%. 
  • Quick Loan Disbursement: The turnaround period for a Gold Loan is short as compared to any other loan type. Usually, a Gold Loan is disbursed within an hour of the submission of all the required documents and the said gold.
  • Collateral or security: To obtain a Gold Loan the borrower has to pledge gold ornaments or gold coins as collateral with the bank or the other lending institution.
  • Loan Repayment: A Gold Loan can be repaid via fixed Equated Monthly Installments (EMI).
  • Pre-Payment: The banks and other financial institutions facilitate the pre-payment of a gold loan. However, banks and NBFCs charge pre-payment charges that may go upto 5% of the outstanding loan amount.
  • Documentation: The documentation involved to take a Gold Loan is comparatively lesser to other type of secured loans.
  • Loan To Value: The loan amount vary on the basis of the value of the gold. However, the loan to value may go up to 75% of the gold value.
  • Processing Fee: The lending institution charges a minimal charge as processing fee that can go up to 2% of the total loan amount.
  • Gold Forfeiture in case of failure in the repayment of loan amount: In case the borrower fails to repay the loan amount to the lender, the lender forfeits the pledged gold and after melting auctions it within 18 months. However, in some cases the banks may wait for relevant period before auctioning the gold in the market.
  • Loan Guarantor: Unlike other type of loans, no guarantor is required for a Gold Loan.

 

Eligibility Criteria for a Gold Loan

  • Who can Apply?: Gold Loan can be applied by any salaried individual, trader, farmer, self-employed professional and self-employed businessman.
  • Age: The minimum age required to apply for Gold Loan is 18 years and above and the maximum age is 70 years.
  • Purity of Gold: The gold pledged as collateral with the bank or any other financial institution should have a purity of 18-24 carats. The bank checks on the purity of the gold and ascertains the loan amount before the loan approval.
  • Residential Status: A Gold Loan can only be applied by the resident of India. No NRI is eligible for a Gold Loan.

 

Gold Loan Documents

The following documents for a Gold Loan are required:

  • Aadhar Card
  • Passport (Valid)
  • Driving License
  • PAN Card
  • Voter ID
  • Photo ID
  • 2-3 Passport size photographs

 

How mymoneymantra can help the borrower in getting the best Gold Loan?

Mymoneymantra is a leading financial services marketplace with an experience of more than three decades. The mymoneymantra team consists of experienced and service oriented professionals who will help you choose the best gold loan offer, suitable to meet your specific requirement. They will keenly analyze your financial needs, and then help you throughout the loan process beginning from the submission of loan application till the loan disbursal into your account and even afterwards for any service requirement.

You can get in touch with our loan experts anytime and obtain the best loan offers.

 

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