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How to get a gold loan? and from where we get it?

How to get a gold loan? and from where we get it? Gold has a certain emotional value to all Indians. For generations, gold has been the backbone of our emergency fund. It is not only used as an ornament to increase personal charm, but also a valuable investment asset. People not only buy decorations but gold coins, bars, and biscuits also attract many people. This is why gold loans have become a popular means of raising funds to meet urgent monetary needs.

For hundreds of years, unorganized lenders have provided gold loans. However, considering its volatility, many financial institutions have begun to treat gold as an investment tool that can be mortgaged.

Since gold is a commodity with increasing value, a G-loan provides an excellent opportunity to harness the power of gold. Rather than paying higher interest rates on personal loans, it is smarter to put idle gold into utilization. The reason why gold loans are the preferred financing option is that institutions charge lower interest rates compared to other retail loans (such as personal loans).

How to get a gold loan? and How does it works?

When you pledge gold jewellery, coins, biscuits, gold bars, etc., the lender will provide you with cash at a predetermined interest rate. Once the review of the basic documents and the assessment of the pledged gold are completed, the loan amount will be paid in cash, demand drafts, or sometimes transferred to the borrower’s account.

Benefits of G-loan

You don’t need to sell gold to mortgage it, and when you repay the loan, you can get the gold back.

  • You can get loans up to 80% of the value of gold.
  • Even low-income individuals or individuals from the lower economic state may not be eligible for traditional loans and can obtain a gold loan without difficulty. You will have the motivation for saving money.

What is a difference between G-loan & personal loan?

G-loan is a secured loan because the gold is deposited in the bank before borrowing.

Short repayment period (0-3 years)

The loan amount depends on the value of gold, not on the individual’s ability to repay.

The interest can vary by 13-16% annually. For those engaged in agriculture, the gold loan interest rate has been reduced to as low as 8%.

How is your gold evaluated?

The procedure of evaluating the deposit varies from banks to loan providers. However, generally, jewellery with the “Hallmark” logo is approved based on the weight, purity and current market value of the gold. The carat range is 18-24.

If your jewellery does not have the “Hallmark” logo, then the value of your gold will be unreliable, and the value you get in the end may be less than the value of gold.

Since gold loans are secured loans, if you fail to repay the loan within the predetermined period, not only will you be charged higher interest, but your gold may also be auctioned. Be cautious when choosing a gold lender, because if there is a default, the chance of losing gold is higher.

G-loan eligibility criteria

The advantages of gold loans are that adults who own gold are qualified. On the off chance that you need to apply, you can check the eligibility criteria listed below:

Age: If you are a citizen of India and age is between 18 to 75, you are eligible for a gold loan.

Gold quality: As bank collateral, you must keep gold jewellery between 18 and 22 carats. If you keep the minted bank coin, it must be 24 carats.

Documents required for gold loans

There are few documents required because availability has nothing to do with factors such as service or profession and income, In any case, you should guarantee that you have ID and evidence of address as per the KYC rules.

GLoan Interest rates and tenure available

The time limit of the gold loan will also depend on loan provider. For example, the term gold loan provided by HDFC Bank ranges from 3 months to 24 months. The maximum repayment period for SBI gold loans is 36 months. Muthoot Finance provides different types of G-loan plans with different maturities.

Factor affecting gold loan interest rates is:

The gold loan interest rate that banks charge you is legitimately identified with the total loan amount. Consequently, on the off chance that you require a large amount then be prepared to pay higher interest on it.

            Banks/NBFC    Gold Loan Rate of Interest
Bank of India7.40%
State Bank of India7.00% to 7.50%
Bank of Maharashtra7.50%
Indian Bank8.50%
Uco Bank8.50%
The Central Bank of IndiaMCLR + 0.50% to MCLR + 2.00%
Lakshmi Vilas Bank8.80%
Punjab National BankRLLR + 1.95%
Dhanlaxmi BankStarting 9.65% (Fixed)
Federal Bank8.50% onwards
Jammu & Kashmir  BankMCLR+ 2.00% p.a
United Bank9.35%
Kotak Mahindra Bank10.5% to 17%
Karur Vysya Bank10.10%
Indusind Bank10.5% to 16%
ICICI Bank10% to 19.76%
HDFC Bank9.50% to 17.55%
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