Gold loans are secured loans that can be obtained using gold as collateral. This is a very common type of loan in India as gold ornaments are a part of most households. The prices of gold also keep rising as a general trend, and these are good to use as collateral.
You can use gold jewellery, ornaments, coins, or in any other form approved by the Reserve Bank of India.
Gold loans can be helpful if you are new to credit and do not have a CIBIL score. Gold is one of the best options for collateral and can give you access to funds easily. Here are some features of a gold loan -
Easy application and approvals, depending on quality of gold
High amounts, depending on quality and quantity of gold
Loans up to ₹1 to ₹2 Crore, depending on the lender
Interest rates starting from approximately 8.85%, depending on the lender
Flexible repayment tenures, based on your eligibility and loan amount
Safety of your gold, so you can be sure you’ll get your gold back at the end of the tenure
Here is a step by step for you to better understand the working of a gold loan -
Take your gold to your chosen lender
Get your gold evaluated
Fill the application form and submit it along with the required documents
The loan amount gets disbursed to your account
The gold is kept safely with your lender
You repay the loan through comfortable EMI plans
Once your tenure is completed, your gold is returned to you safely
You can apply for gold loans from the following financial bodies -
Commercial Banks, which includes small financial banks, local, regional, and rural banks. It doesn’t include payments banks.
All co-operative banks, urban and rural.
All Non-Banking Financial Companies, which includes housing finance companies as well.
Muthoot Finance, Mannapuram Finance, etc are some NBFCs that specialize in gold loans.
The eligibility criteria for getting a gold loan are as follows -
The gold you want to pledge should be allowed to be pledged as per the rules of the RBI
You should have documents to prove that the gold belongs to you
You should be above the age of 18 or 21, depending on the lender
You should have suitable proof of income
You should be a citizen of India
CIBIL score is not an important factor in getting a gold loan, as it is a secured loan. However, if you have a high CIBIL score, you might be able to negotiate a lower rate of interest.
You need very few documents to apply for a gold loan. They also vary depending on the lender you choose. Here is a general list of documents that you will need for a gold loan -
Proof of identity
Proof of address
Proof of income
Paperwork to prove that you are the owner of the gold you want to pledge
Duly filled gold loan application form (if applying offline)
Gold loans are a great way of turning assets into funds. This type of loan is also easy to procure as it is a secured loan. You are more likely to get higher loan amounts and lower interest rates, as compared to personal loans. You can check the rates of interest offered by various banks and NBFCs before deciding on one.
However, if you are not someone who wants to take a gold loan but still needs funds, personal loans are there for you. To apply for a personal loan through Moneyview, check out our website or app.Yes, a gold loan is a secured loan, and you can get it easily. Thus, if you need urgent funds at low rates of interest, a gold loan is a great option for you.
You use your gold as collateral and pledge it against funds provided to you by the lender. Once you have repaid the whole amount, you will be safely given back your gold.
How much loan you can get will depend on the type of your gold, and also on the market value of gold on that day. Suppose the price of 10g of gold is ₹10,000 on a day, you will be able to get ₹7,000 (70% of the market price) as loan against your gold.
You can get a gold loan in a matter of a few hours to a few days, depending on the processing and the approval time of the lender.
The best bank or NBFC will depend on your location, amount required, and preferred rate of interest. You can take a look at the rate of interest offered by various banks and NBFCs and see which is the best option for you.
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