Gold Loan

OVERVIEW

Gold loan as the name suggests is a loan which you take against your gold. One has to basically keep his/her gold ornaments as collateral to any bank or NBFC. The lender then weighs and examines the gold articles and sanctions amount that is a certain percentage of the gold’s value.

Gold loans are taken for a short tenure ranging from 3-12 months. You can easily repay the loan through equated monthly instalments (EMIs) which the lender will design as per your need and repaying capacity. You can get your gold articles back once you repay the entire loan amount.

UNIQUE FEATURES AND BENEFITS

1.Just like a personal loan or a business loan there is no restriction on its end-use.

2.Minimal documents required: Since gold loan is a secured loan, all you need to keep with the lender is your gold and an application form and KYC documents. (PAN and KYC documents such as valid Passport/ Driving License /Voters ID card /Aadhaar Card).

3.Interest Rates: The interest rates for gold loans starts from 7.50% onwards.

4. Quick disbursal: Amongst all other types of loans, gold loan claims fastest disbursals with disbursement done within a few hours of application process.

5. As Gold loan is a secured loan, most lenders would not demand a high credit score.

ELIGIBILITY CRITERIA FOR GOLD LOAN

Here are the minimum eligibility required to avail a gold loan                  

Age:  Minimum: 18 years Maximum: 65years.
Loan AmountLoan amount starts from a minimum Rs.1500/- Up to Rs 1 Cr. (Amount varies from lender to lender).
Work ProfileSalaried and Self-employed.
Businessmen also prefer this loan to meet their working capital requirements.
Some lenders lend gold loan to housewives and senior citizens as it is a secured loan.
Gold QualityThe most essential requirement for gold loan is the borrower should own gold.
The gold article to be mortgaged should be in between 18-24 carat.
Type of GoldGold bars and coins.
Jewelry with 18-24 carat purity.

DOCUMENTS REQUIRED FOR A GOLD LOAN

Documents required in Gold loan are minimum and very basic in comparison to all other loans.

  1. Completely filled application form.
  2. Two passport sized photographs.
  3. ID Proof:  Passport, Pan card, Driving License, Voter ID card, Aadhar card, employee identity card in case of government employees, ration card etc.
  4. Address Proof: Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/electricity/water/credit card bill or Property tax.

GOLD LOAN PROCESS

Here is a step by step process of Gold Loan:

FREQUENTLY ASKED QUESTIONS

  • What is a Gold Loan?

Gold loan as the name suggests is a loan which you take against your gold. One has to basically keep his/her gold ornaments as collateral to any bank or NBFC. The lender then weighs and examines the gold articles and sanctions amount that is a certain percentage of the gold’s value.

  • What is the interest rate of a Gold Loan?

The interest rates for gold loans starts from 7.50% onwards.

  • What documents are required for a Gold Loan?

Since gold loan is a secured loan, all you need to keep with the lender is your gold and an application form and KYC documents. (PAN and KYC documents such as valid Passport/ Driving License /Voters ID card /Aadhaar Card).

  • What factors are considered in deciding the amount for gold loan?

The weight, quality,purity of gold and its market price. And If the gold ornaments you are keeping as collateral, contain precious stones, the loan amount is still determined on only gold & not the precious stones.

  • Who is eligible to take a Gold Loan?

Any Indian citizen who is 18 years and above and owns gold articles is eligible to take a gold loan.

  • Do I need to provide any security to avail a Gold Loan?

No, the only security that is required is the gold itself which you pledge to the lender to avail the loan.