Gold has been synonymous with prosperity and power since ancient times. A new feature of gold is gold finance. A gold loan is a loan against your gold articles. You can get instant funds without selling your lovely jewellery or other gold items. It is a way of getting cash from gold where you pledge gold to the lender to get funds.
Points to Consider Before Planning for a Gold Loan
Most banks and NBFCs offer a online gold loan. Different lenders provide loan on their terms which may vary from one to the other. The loan amount depends on the quantity of gold and its quality in carats.
There are specific points which you should take into consideration before making plans to avail a gold loan. They are as follows:
- The Loan Amount from Gold loan: This depends upon the amount of gold you can pledge with the lender and its market value.
- The Interest rate on loan: A gold loan, being a secured type of loan, has a lower interest rate in comparison with other kinds of loans.
- Add-on charges: many lenders charge fees for loan processing, document verification, payment default charge, late payment fees, etc. which you must keep in mind.
- The Loan Tenure: The gold loan tenure ranges from 3 to 36 months.
- The credibility of the lender: The lender must have excellent reliability concerning the safety of your gold. It must have an exemplary customer care, credit rating and market reputation.
- The loan repayment schedule: You can choose from a variety of repayment options, like EMI, single repayment at the end of the tenure, or regular payment of interest and a single time payment of principal amount at the end, etc.
Gold Loan Eligibility
Every lender has its own set of eligibility criteria for the loan that it offers. You must fulfil these specific eligibility criteria of the lender before applying for the gold loan. Hence, you must visit the lender’s website and check the eligibility before you decide to avail a gold loan. Some of the standard eligibility criteria for all the lenders are as under:
- The age of the gold loan applicant should be 18 years or more at the time of loan application.
- The applicant should possess good standard or quality gold articles which it is ready to pledge to the lender.
- The gold items must at least have gold worth 18 carats or more.
- The credit record of the applicant must be good.
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Documents for gold loan application
You must be ready with the below-mentioned documents before you start applying for a gold loan. These are some simple and basic types of documentary proofs which every lender will ask for while processing your old loan application.
- An application form that is wholly and correctly filled.
- Passport-size photographs
- Any valid and approved Identity proof
- Any valid and approved Address proof
- A proof of your Signature
- Your income tax return or PAN card or Form 60
- A valid proof of age
Steps to avail a Gold Loan
You should follow some simple steps to get cash for gold articles as a gold loan. Here are these steps:
Making a loan application:
You have an option of online or an offline mode of a loan application. For online mode, you must visit the lender’s loan application portal or website to fill an online application form, upload scanned copies (or e-copies) of the necessary documents and click ‘submit”. But if your choice is an offline mode of application, you must visit the nearest branch or office of your lender and perform the necessary procedure of loan application.
Verification of loan documents
The lender will sanction your loan application only after the verification of your documents and other credentials.
Evaluation of quality of your gold articles and Loan amount disbursement:
The experts evaluate the quality of gold in carat and submit a report to the lender. The lender then decides the amount of loan payable to you and makes on the spot disbursement.
A gold loan is a handy and quick way of raising emergency funds. It is very easy to avail, and the loan amount depends upon the number of gold items you are ready to pledge.