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Features Of Gold Loans In India

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By Author: neha sharma
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"Since ancient times, Indians consider gold as an auspicious metal. It holds a special emotional connect for most households and taking loans against gold is not considered a preferable option. The value of gold is continuously rising, and it makes sense to utilise its power. Most banking and Non-financial institutions have ventured in this space as they believe gold has a good capital appreciation rate.
In this loan, one has to deposit the household gold in the form of jewellery with the bank or financing agency and get a loan of up to 80 per cent of the value of the gold deposit.
The interest rate for gold loans in India is much lower than that of personal loans.

Taking a loan against gold from NBFC or bank provides you with instant cash for most of the immediate expenses such as a quick family holiday, vehicle purchase, medical emergency etc. Here we have listed down few features of taking a gold loan from financial institutions.

1) Instant processing:

There is no such thing as unsecured gold loans. Once you submit the gold jewellery to the bank; the officials evaluate it and credit the loan amount to your bank account. The gold is kept as collateral with the lender. The minimum amount for loans is Rs 50,000/. Gold Loans for less than Rs 50000/- also available for rural markets. Most banks process gold loan within an hour, thus cutting down the processing and fund disbursal time.

2) Basic Documentation & No CIBIL score:

While most loans ask for Tax returns and income proofs, gold loans require basic documents such as:
• Passport
• Valid driving License
• Voter's ID Card
• Aadhaar Card issued by UIDAI
Even though you have a bad credit history in the books of account, banks are least concerned when it comes to gold loans. Therefore, if you are in urgent need of funds, try availing gold loans irrespective of bad credit score.

3) Digital application:

With the advent of digitisation, you can easily apply online for a gold loan instead of visiting the bank. Visit the bank’s official website and calculate the loan amount to borrow on the online gold loan calculators. You can fill the application form available on the site. After submitting the form, bank officials will get in touch with you through call or SMS concerning the application.

4) Convenience of repayment:

Borrowers get a choice to make onetime payment. It means a person can pay only the interest during the tenure of the loan. And pay the rest of the borrowed amount in a single sum at the end of the loan duration.

Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about loans. Through this article, she writes about the features of the gold loan in India.

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