Not only is your gold jewellery a prized possession and investment, but a smart way to borrow money as well. To understand how you can use your gold jewellery for an instant loan, check out this writeup.
Gold holds a unique position in the hearts of Indians. India is, in fact, one of the world’s largest gold importers. When you own gold jewellery, there is this particular sense of financial security you gain. In times of financial emergencies, you know that if necessary to meet the obligations, you can sell your gold jewellery. But when you can take out a loan against it, why sell your gold? Check out how you can borrow an immediate loan using your gold jewellery.
What is a Loan against Gold?
As the name says, by pledging your gold ornaments, the Gold Loan enables you to borrow money for your financial needs. It means you’ll have to commit your gold articles with your lending institution, and the lender will let you borrow a loan against the gold deposited. During the tenure, you can repay the loan amount and take your gold back from the lender. You are not permitted, however, to borrow a loan for the full amount of the gold that you pledged. Generally speaking, lenders only offer loans for a set amount of the valuation of the gold. Nevertheless, whether you are in a financial emergency or wish to take advantage of an opportunity to invest, a loan against gold makes a lot of sense.
How much are you allowed to borrow?
The loan against the gold loan is a short-term loan with a maximum one year term. To provide enhanced comfort to the borrowers, lenders provide Gold Loan/gm. They have minimum and maximum borrowing caps of their own for the same thing. The interest in gold loans is mainly in the percentage ranging from 7.50% 14% per annum.
Gold Loan Eligibility
A loan against gold, unlike most forms of loans, has minimum eligibility criteria. You have to be 18 years of age or older, and you must be the legitimate owner of the ornaments you are going to pledge. For these loans, banks are not expected to consider factors such as your salary, age, credit score, etc. as you keep your jewellery as a protection against the amount of the loan.
The lender can sell off the gold jewellery to reclaim their money in case a creditor is unable to repay the loan.
What is the procedure to apply?
The application and approvals are quick and straightforward for an instant loan against gold as it is a secured form of credit. In fact, within a single day, you will apply for the loan and get the sum disbursed. For this, you will be expected to visit your chosen lender’s nearest branch. To measure the maximum quantity you can borrow, the lender would value your gold. To get the loan, you will have to fill in a loan application form and provide ID evidence and address verification. The lender will approve the loan immediately and disburse the balance of the loan.
Quick Process – Gold loans are guaranteed loans and hence have lenient qualifying requirements and minimum paperwork for speedier processing. For lending permissions, it does not even require a credit score. And thus in just a few hours, lenders usually disburse the loan. Individuals who are qualified for an online gold loan will get the amount in a couple of minutes.
Lower interest rate – Gold loans charge a lower interest rate relative to unsecured loans such as personal loans. The gold loan interest rate can be further reduced if you bind another asset as collateral.
No processing fees – On gold loans, many banks and NBFCs charge zero processing fees. Even though a lender charges processing fees, it usually is 1 percent.
No foreclosure fees – Some lenders do not charge any prepayment fees, although some banks charge a 1% prepayment fee.
Income proof is not required– As the loan is secured against gold, lenders typically do not ask for an income proof in gold loans. Anyone can then apply for a gold loan, whether they are making money or not.
The credit score is not required – Approval of the loan does not depend on the credit score, unlike most loans. In the case of most loans, the cost of the loan is determined based on the borrower’s repayment potential and credit history, whereas in the case of a gold loan, the amount of the loan is calculated on the market value of gold.
How is it possible to apply for a Gold Loan?
As a secured form of credit is an instant loan against gold, the application and approvals are simple. In fact, within a single day, you will apply for the loan and get the sum disbursed. For this, you will be expected to visit your chosen lender’s nearest branch. To measure the maximum quantity you can borrow, the lender would value your gold. To get the loan, you will have to fill in a loan application form and request documentation such as ID evidence and address verification. The lender will accept the loan immediately and disburse the balance of the loan.
What sort of gold jewellery is it possible to pledge?
Many lenders only consider pure gold jewellery ranging from 18 to 24 carats. Some of the lenders also accept 24-carat gold coins with a purity of 99.99%.
Take an urgent loan for gold jewellery
When you need easy access to funds that you do not conveniently have, through gold jewellery, an immediate gold loan would be an excellent choice.
A loan against gold is one of the easiest ways to obtain extra funds to cover your emergencies, with competitive Gold Loan interest rates, prompt clearance, and little paperwork.