A gold loan is a specific kind of loan where you must use your gold jewellery or coin collection as collateral. Loans up to 75%–80% of the gold’s whole value are frequently offered based on the current jewel loan per gram rate. You can repay your gold loan through monthly instalments. The lender will refund the gold that was deposited once the loan has been repaid. Most individuals are unsure whether a gold loan is a secured or unsecured loan. A gold loan is secured because it is provided in exchange for your gold, which serves as collateral. The required documents play a significant role in the gold loan processing. Correct documents help you prove your eligibility for the loan. There are no tax advantages associated with your gold loan unless you utilise the money for home improvements or the purchase of a residential property. You may claim a tax deduction for home improvements under Section 80C of the Income Tax Act of 1961.
Unlike other secured loans like home loans or auto loans, there are no restrictions on the final use of gold loans. The majority of lenders and commercial organisations provide gold loans with low-interest rates. Lenders decide the loan amount on the basis of the current jewel loan per gram rate. The loan approval and disbursement procedures are simple and quick. A solid credit history is not necessary to be approved for a gold loan.
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When you apply for a Gold Loan, you essentially take a loan in lieu of gold ornaments, such as gold jewellery and ornaments, which is secured by the lender. It is one of the simplest and quickest ways to gather funds for your financial needs. The purity of the gold, its rate on that day and other important factors impact the loan amount when you take a loan against gold jewellery or ornaments.
Documents required for a gold loan:
Send one of the following-
- PAN card or Form 60
- One passport-sized photograph
- Passport
- Voter’s ID
- Driving license
- Aadhar card number
- Agri-allied occupation documentation is needed for a gold loan for farmers.
Fees and charges:
- Loan processing charges- 1% of the disbursal amount
- Foreclosure charges- 1% plus applicable tax
- Renewal processing fees- Rs. 350 plus applicable tax
- Prepayment charges- 1% plus applicable tax
- Stamp duty and other statutory charges- At actual
- Auction charge- As per actual
- Bounce charges- Rs. 200 plus GST
- CIBIL report copy charges- Rs. 50
- Legal and collection charges- At actual
- TOD charges- 18% per annum
Benefits:
- Faster processing- Lenders decide the loan amount as per the recent jewel loan per gram rate. The lenders are typically delighted to grant loans because the gold loans are secured by actual gold. Lenders usually release loans within a few hours since lending against gold is safe for them. This is because they have the option of selling the gold if you don’t pay.
- Option to pay interest only- One notable aspect of gold loans is that the borrower can choose to pay only the interest portion. The principal remaining can be paid at the time the loan is closed.
- Lower interest rate- Lenders charge lower interest rates on these secured loans than they do on unsecured loans like personal loans. Personal loans often have interest rates that start at 15%, although interest rates for gold loans typically range from 13% to 14%. Also, the interest rate on a gold loan can be further lowered by adding another security as collateral.
- No processing fees- Several NBFCs don’t impose processing costs since these loans are granted promptly in exchange for gold that is held as collateral with the lender.
When you apply for a Gold Loan, you essentially take a loan in lieu of gold ornaments, such as gold jewellery and ornaments, which is secured by the lender. It is one of the simplest and quickest ways to gather funds for your financial needs. The purity of the gold, its rate on that day and other important factors impact the loan amount when you take a loan against gold jewellery or ornaments.
In situations when the borrower is in urgent need of money, a gold loan becomes a good option to avail the required sum of money against sufficient gold assets for a quick and easy loan disbursal, which would not be possible through formal credit processes. There is no requirement of a good credit history to avail a gold loan and the paperwork involved is also minimal because the collateral is the gold asset itself.
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Gold loans are a quick and secure way to get funds for personal needs. The loan is secured by the lender, which typically represents a percentage of the fold’s value, depending on the scheme, and attracts regular interest until the loan is completely paid off and the gold assets are returned.
We highly reputed gold loan providers in the country, with pan Indian reach and trust in its name. With multiple gold schemes that provide borrowers with the flexibility to get funds for their immediate financial needs and offers a pleasant experience while getting a gold loan in India
