Gold loans are a wise investment, but with
the proper know-how of the following features:
1. Loan Amount
How much you get sanctioned depends on market values and lender capabilities.
The amount of loan against gold starts from as low as Rs.10,000, though
the minimum value goes up to Rs.25,000 in urban areas. Loans of up to Rs.2
crore are allowed though some private lenders to an upper cap of Rs.20 lakhs.
One can pledge as many gold articles as possible.
2. Interest Rates
Interest rates on gold loans start from 10.50% onwards. The rate can go up to
19%. Interest rates tend to go higher if you choose to procure your gold loan
from either private lenders or from NBFCs like Muthoot Fincorp.
3. Gold Loan Tenure
The minimum tenure allowed on Gold Loan extends between 3-6 months, and the
maximum period of tenure is as high as 4 or 5 years. But most lenders usually
allow a maximum repayment period of about only 2 years.
4. Collateral against Loan
You can deposit your gold jewelry of 18-24carats as a deposit in lieu of which
the cash against gold would get
sanctioned. Gold coins or bars of 22carat purity tends to fetch better loan
amounts. These articles stay with the lender until the time the loan gets
closed completely. If you fail to repay, the banks would then sell off the gold
articles in order to recover the losses.
5. Prepayment
A borrower can choose to repay the loan before the tenure comes to a close, in
which case banks are known to charge a certain percentage of the total loan
amount as a pre-payment penalty. This penalty ranges between 1% to 3% of the
loan given. The lock-in period would be none at all or a minimal 1 to 6 months,
on account of the shorter duration of gold loans.
6. Processing Fee
Some NBFC would waive this off, so their loans seem more attractive to
potential customers, but most banks wouldn’t. So you would get charged a
processing fee that is calculated as a percentage of the approved loan amount;
it usually ranges between 0.50% to 2%.
7. Late Payment
Late payments always incur extra costs on the borrowers. If ever a borrower is
late in repaying the loan, they are then obligated to pay a charge of 2% per
annum over and above the applicable rate of interest – this is the late payment
fine.
Only basic KYC documents like Voter Id/Aadhaar card/PAN Card as identity proof,
passport/driver’s license/electric bills as address proofs and passport size
photographs are required to get a gold loan approved. Anyone between 21-65
years of age can avail it, without having to provide employment records, proof
of income or a CIBIL score.
Whether you are a salaried professional or self-employed, a housewife or a
senior citizen, you can always avail of gold loans. They are also available to
farmers who want to meet their farm credit/infrastructure or other ancillary
activity costs with the approved cash
for gold.
9. Safety
All private banks are professional institutions which take utmost care in
locking up your valuable gold in robust vaults equipped with 24/7 surveillance.
Some lenders also provide the option of protection against theft.
10. Time Taken
With online procedures substituting for face to face interactions. Gold loans
these days take a few hours to get approved. With all the necessary documents
in place, you can get your gold loan on the same day as applying for it.
Choose Gold Loans to know your gold is in safe hands as you take home
attractive interest rates.
