Gold Loan

Unlock the Possibility of Getting Loan on your Gold Jewellery

In India culture gold jewellery plays an integral part i.e. be it festival, wedding or any key event in life, we just cannot ignore gold. Being the most populous site in the world, values which have been imbibed into us since ancient times, our attraction for gold comes natural to us and we have imported around 1/4th of world’s gold production. Intrinsically gold is being imported sometimes on marriage pretext, gold bars, gold coins, interestingly with various other reasons, shapes and sizes.

India has witnessed the many key development over a period of time is that banks have started appreciating the importance of gold and private lenders also look at this avenue as the most safest resort. Couple of factors that immediately makes it stand out are purity and weight. Extracting gold is considered to be the most time consuming and technical exercise and that’s what makes it valuable. Like any other instrument in the business world, the price of the gold is governed by demand and supply factors as this is the most ancient and rarest form of wealth makes it worthy of time.

How does loan against gold work

It will not be understatement to say that bank loan against gold is the most easiest and safest to get, all it takes is to just walk up to your bank and offer your gold as a collateral for security. Many banks offer low interest rates when as valuable as gold is kept with them as security, in fact, some banks have gone a step ahead and offer flexi pay back plans. Access to such easy and viable option have resulted in creating win-win situation for both bank and customer i.e. the banks feel safe since, they have physical possession of gold and the customer feels happy when they get the money they wanted that too at comparatively lower interest rates.

Trading in gold [buy or sell]

Behaviour aspect of trading in gold is very much similar to trading in stock market, one has to pay the attention of prevailing gold price and get some understanding of how the gold prices have behaved in the last 3 months, 6 months, 1 year of may be last 5 years. The golden remains the same for gold too, you buy the commodity when the price is low and sell at higher price in order to maintain vested interest in the market, earn profit and make further investments. Investing in gold is a safer option as comparatively the gold prices may not fall by huge margin as it is seen in the stock market. Historically, the investment made in gold is known to provide guaranteed return as the prices of gold seems to remain on positive side.

FAQs

What is the difference between gold loan and other loans such as personal loan or credit card?

Foremost differentiating factor between the gold and personal loan is for the former you put your valuables at the bank and their evaluation coupled with your requirement essentially drives the dispersal whereas for the later, factors such as CIBIL score, source of income and repayment capacity of an applicant defines whether one will get the loan or not. Be it gold loan or personal loan people as well as bank look at these loans as the short term financial solution. The absence of collateral drives the interest rates between the two loans as gold loan clearly have a collateral whereas the personal loan or credit card are un-secured thereby, one has to pay higher interest rates. Since, personal loan is unsecured if, not managed properly may lead a person into debt-trap.

What are the eligibility criteria for availing a gold loan?

Anyone [over 18 years] owning an ornament is eligible for gold loan. Second step is to submit their ornaments at the bank for evaluation purposes, once the documents are submitted for evaluation. Post verification or evaluation which entails checking the purity, loan amount is sanctioned to an applicant.

Should I submitted the bank statement or income related proof to get gold loan?

Absolutely not, normally banks ask for identity proof (driving license, aadhar card, pan card, voter id or passport and in some cases ration card) along with the residential proof.

How much is the interest rate on such loans?

Interest rates vary from bank to bank, but, one has to be prepared to avail loan on interest starting at as low as 10.00% up to 24%.

Can I get gold loan even if, my cibil score is bad?

Yes, because they already have collateral in the form of gold, bank under normal circumstance will not make decision basis cibil score.

Comparisons

What is the difference between gold loan and other loans such as personal loan or credit card?

Foremost differentiating factor between the gold and personal loan is for the former you put your valuables at the bank and their evaluation coupled with your requirement essentially

Bank Name Interest Rate (% p..a) Financing in %
Muthoot Finance 14.0 % - 24.00% 60
Manappuram Finance 14.0 % - 26.00% 60

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