Your gold jewelry is not only a valued possession but also a smart way to ask for money from borrowers. Rupeek explains how you can use your gold jewelry for a gold loan. Indeed, Indians know how to value gold. India is one of the largest gold importers on the globe.
Gold jewelry gives you a sense of financial security. As you go through a financial crisis, you know that you can trade on gold to get instant cash. Why will you sell your gold when you can get a loan against it? Keep reading to learn how you can borrow money with your gold jewelry.
What is a gold loan?
As the name gives a hint, a gold loan lets you borrow money by pledging your gold jewelry. Financial institutions leasing gold loans offer loans per gram for the convenience of the borrowers and are the best in providing the best gold loan. In simple terms, it needs you to keep gold loans with the borrowers. The creditor allows you to borrow a loan against your jewelry. Nevertheless, you can’t borrow money for the entire amount of gold pledged.
Typically, lenders give loans on a fixed percentage of the worth of pledged gold. Are you going through a financial crisis? If you want to make the most of investment opportunities, go for a gold loan.
What is the maximum amount of money you can borrow against gold?
You get a loan against gold for a short or longer duration. It is worth noting that there is a maximum and minimum limit of money you can borrow against your pledged gold.
You can make it easier with rupeek’s gold loan interest rate calculator. You will get all your results in some clicks.
What are the eligibility criteria for a gold loan?
Unlike other kinds of loans, a gold loan has minimum eligibility criteria. The borrower should be above 18 years and the legal owner of gold ornaments pledged for a gold loan. Financial institutions leasing gold loans don’t have to take your age, income, or credit score into consideration.
It is because you’re keeping your gold jewelry as a security against the gold loan. If a borrower fails to repay the loan, the lender has the right to auction the gold jewelry to uncover the money.
How can you apply for a gold loan?
As a gold loan is a secured deposit, the approval and application cycle are quick. The fact is that you can apply for the loan and get the amount disbursed in a day. Visit the nearest branch of your lender to get a gold loan.
The lender measures your gold to tell the maximum loan amount you can borrow. You need to fill up a form and submit documents to get a loan, even some institutions provide home service that let you apply for a gold loan sitting at home.
Benefits of a Loan Against Gold
Some of the main advantages of loans against gold are given below:
- “Pay interest only” option: Gold loans often arrive with a remarkable feature that enables the borrower to only pay the interest component while reciprocating the loan. The principal component can be paid at the end of the loan term or during the closure courtesies of the loan.
- Zero processing fees: Many NBFCs and banks do not ask for any procedural fees since gold loans are supplied instantly with gold as collateral owned by the bank.
- Minimal foreclosure charges: Some lenders and banks either don’t demand or have minimal prepayment fees of one percent on gold loans.
- No-income proof to be furnished: In most gold loan apps, lenders don’t demand payment proof from borrowers since the loan is secured against the gold promised by the borrower.
- Safety of physical gold: The duty of safely carrying the physical gold is that of the lender. It is generally kept safe in the bank’s locker and, therefore, borrowers don’t have to bother about the same. Once they reciprocate the loan, the gold is returned by the bank.
- No effect of poor credit history: In most loans, the bank supplies loan amounts relying on the credit history and repayment ability of the borrower. Nevertheless, this is not the issue with gold loans. Since gold is utilized as collateral, lenders are guaranteed about repayment of the main component and therefore, don’t depend on the credit history of the borrower before supplying the loan.
Gold loans are uncomplicated to get, but borrowers have to make sure that they reciprocate the loan on time, failing which the gold may have to be given away to the bank. Borrowers can take a gold loan from a gold loan company of their preference since the distribution process is normally fast and comfortable.