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The best way of making use of the gold that is lying idle with you is to avail a loan at any financial institution that is offering loan against pledge of gold ornaments and gold coins. If you are in need of a higher amount of loan, it is best to pledge gold ornaments. As per the guidelines of Reserve Bank of India (RBI), gold coins only up to 50 grams can be pledged to avail a loan.

The Personal Loan availed can be used for any purpose. This is nothing but a multi-purpose loan. The documentation and loan process are simple and hassle-free as the security offered is by way of gold ornaments and gold coins which can be auctioned and the sale proceeds adjusted towards the outstanding balance in the loan account in case the borrower defaults payment.

HDFC Gold Loan is the loan offered by HDFC against the security of gold jewellery and gold coins. The whole process of documentation and disbursal is quick and hassle-free. The loan can be used for meeting personal requirements like medical emergencies, wedding expenses, education expenses, travel expenses, renovation, and repair of an existing property, expansion of business, and so on.

The key features of HDFC Gold Loan are:

• Nature of facility: Both Term Loan and Overdraft facility is available.
• Purpose of the loan: The loan can be used for personal requirements or business requirements. There is no restriction on the end use. At any time, any financial emergency arises, Gold Loans can be availed to deal with the situation.
• Quantum of loan: The loan amount will be equivalent to the weight of gold pledged with a minimum of 10,000 in rural areas and 25,000 in other areas. The maximum Gold Loan is defined as per the maximum gold that is pledged with them.
• Timeline: The documentation requirement is minimal and the loan is disbursed in just 45 minutes.
• Security: The Gold Loan is given against the security of gold jewellery and gold coins
• Interest: Interest is charged at 11.50% to 15% p.a. The existing customers of the bank with a good track record can avail a Gold Loan at concessional interest ate as decided by the bank on a case to case basis.
• Repayment: The loan can be repaid between 6 months to 48 months. The loan can be paid in a lump sum at the end of the tenure as in the case of bullet payment or by way of EMI.
• Margin: The margin is set at 25%

The benefits of HDFC Gold Loan are as given below:

• Disbursal of the loan is very quick. The loan can be availed the same day across the counter
• Both term loan and overdraft facilities are available
• Competitive rate of interest. Existing customers with a good relationship will be offered concession in interest rates.
• No hidden charges.
• The quantum of the loan is based on the purity of the loan also. Rate per gram considered to arrive at the loan amount varies with the purity. 18 carats to 24 carats gold ornaments and gold coins are accepted as security
• All their rates and charges will be communicated up front in writing, along with the quotation. There is a good level of transparency regarding their rates and charges and you need not feel sceptical about the rates and charges.
• The safety of the gold ornaments and coins pledged with them is ensured by keeping them in a safety vault.
• Women beneficiaries are offered a lower rate of interest

There are various types of HDFC Gold Loan Schemes and they are detailed below:

Agricultural Gold Loans:

• This loan is given to farmers and agriculturists for expenses incurred for crop production and other agricultural allied activities. For this loan the farmer has to produce:
• Proof of owning agricultural lands and engaged in farming activities, by way of land records
• Proof for having utilised the loan for the purpose it was availed also has to be produced

Non-Agricultural Gold Loan:

• This loan can be obtained by salaried persons, self-employed individuals/professionals, businessmen, students, and retired persons. The only requirement is that they should have gold to offer as security for the loan.
• The purpose of the loan is not restricted. It can be used for any purpose except for any speculative purpose. The loan can be used for medical emergencies, wedding expenses, education expenses, to plan a holiday, for renovation repairs of the existing property.

Gold Loan with EMI option:

• Under the scheme, the loan can be repaid in easy instalments
• Both the principal and interest component have to be paid a month on month and the repayment will start from the month subsequent to the month of disbursement of the loan.
• This facility is offered for a loan with more than 3 months repayment period
• It is generally offered in case of a pre-approved loan to existing customers of the bank with a good track record.
• The loan-to-value (LTV) set for this scheme is 75%, i.e., the loan will be with a margin of 25%. The loan only up to 75% of the value of the gold will be released.

Gold Loan with Bullet Repayment option:

• Under this scheme, the borrower can pay the principal in a lump sum at the end of the tenure of the loan.
• Normally the tenure of the loan with this option will be 3, 6, 9 and 12 months. This option is mainly for short term Gold Loans.
• Interest will be calculated on a monthly basis. Only the interest has to be paid as and when due.
• The LTV fixed for this scheme is 65%. This loan will be with a margin of 35%. Loan up to 65% of the value of the gold as assessed will be sanctioned.

Gold Loan with overdraft facility:

• The loan under this scheme is revolving in nature. It means the entire loan will not be disbursed at a single time.
• A credit limit will be fixed on the loan account to the extent of the security offered
• The funds can be withdrawn and deposited any number of times
• Interest will be charged only to the extent of the funds utilised. The interest will be calculated on the daily balance.
• If there are any deposits made into the account, the same will be available for utilisation
• This scheme is appropriate for businessmen who require funds for day to day operations
• The margin set for this scheme is 25%
• The overdraft facility can be renewed by paying renewal processing fees

The following are the eligibility criteria for the HDFC Gold Loan.

• The applicant should be of 18 years of age or above
• The applicant should have a regular source of income
• Salaried persons, self-employed individuals, students, retired persons, and businessmen are eligible for the loan.

The documents required for HDFC Gold Loan are:

• Gold Loan application
• Driving Licence
• Passport
• Aadhaar Card
• Voter's ID
• PAN Card or Form 60

The rates and fees for HDFC Gold Loan apart from the interest are as detailed below:

The points to remember while availing HDFC Loan are:

• For arriving at the weight of the gold ornament pledged, the gems and stones studded will be excluded from the weight.
• The rate applied is based on the purity of the gold ornament pledged. A 24-carat gold ornament will fetch a better loan amount than an 18-carat gold ornament.
• Both hallmarked and un-hallmarked gold ornaments are accepted as security
• The Indian Bullion and Jewellers Association (IBJA) will quote the rate on a daily basis. The ornaments are valued at the average rate for 30 days as quoted by IBJA as per RBI guidelines. The rate per gram of gold stipulated for granting the loan is based on the average rate for 30 days quoted by IBJA from time to time. If the purity of gold is less than 24 carats, then the gold will be valued proportionately.
• A credit score of an applicant does not really matter to avail a Gold Loan. An applicant with a low credit score is also eligible for the loan.

How to apply for HDFC Gold Loan?

• You can apply for a Gold Loan with HDFC Bank directly by visiting the nearest branch
• You can also apply through the official website of the bank by filling an online application form. On completion of the application form and submitting online, the representatives of the bank will get in touch with you and help you complete the process.
• Alternatively, you can call the HDFC Customer care request for a call back or SMS. You will either get a call or SMS from the bank's representatives and they will take you further from there.

What are the components that decide the value of the security offered?

The purity and weight are the two components that decide the value of the security. The purity of the gold accepted as security is 18 carats to 24 carats. The higher the purity the better the rate per gram will be. Gold coins only up to a weight of 50 grams can be accepted as security for a Gold Loan as per the guidelines of RBI.

How is the EMI calculated for HDFC Bank Gold Loan?

The formula to calculate Gold Loan EMI is EMI = {P x R x (1+R)^N}/{(1+R)^N-1}

In this formula:

EMI is Equated Monthly Instalment

P is principal or the sanctioned loan amount

R is the Rate of Interest. Interest should be the monthly rate

N is the tenure

What happens when the gold rate falls during the tenure of the loan?

HDFC obtains an application form wherein a declaration will be given by the borrower that in the event of a fall in the gold rate during the tenure of the loan bank can, with 7 days' notice stipulate for additional collateral security to accommodate the LTV requirement.

In the absence of additional security, the borrower can pay the amount required to accommodate the LTV requirement.

If the borrower fails to do either of the two then the bank has the authority to auction the security and adjust the proceeds towards the outstanding balance.

What is the advantage of HDFC Gold Loan?

The advantage of HDFC Gold Loan is that it offers varied repayment options and the customer can choose the option that is convenient. Repayment can be either by way of EMI wherein a stipulated amount as per the affordability of the borrower can be paid. The other option is payment of interest as and when due and the principal to be paid in a lump sum at the end of the tenure.

2019-04-22: HDFC Bank Q4 net profit up 23 percent at 5,885 crores

The net profit of HDFC has increased from 5,885 Crores for the 4^th quarter of FY 18-19 recording a 23% increase as compared to 4,799 crore during the previous year. There have been a large number of disbursements under the retailing lending portfolio which includes car loans, personal loans and, Gold Loans during the year. The bank has made this profit on account of the consistent asset quality, growth under lending and revenue collection.