Apply for Gold Loan Online
Gold Loans: Your Complete Guide to Quick and Easy Financing against Gold
Need quick funds to cover an emergency or achieve a personal goal? Choose a gold loan – quick approval, low paperwork, and your gold is safe.
What is a Gold Loan?
A Gold Loan is a type of secured loan where you provide your gold ornaments or coins as collateral to borrow money. The loan amount is determined by the weight, purity, and market price of your gold. Since you have provided something of value as security to the lender, gold loans typically offer a cheaper interest rate and a better experience with the approval process compared to unsecured loans such as personal loans.
Gold loans are particularly popular in India because most families own gold. Gold loans can convert your idle gold assets into immediate cash flow, while you don’t have to become the owner of the gold you pledged.
Features of Gold Loans
Here’s a quick summary of what to expect when applying for a gold loan:
| Feature | Details |
|---|---|
| Loan Amount | ₹10,000 to ₹50,00,000 (based on gold value) |
| Interest Rates | 7.5% to 16% p.a. |
| Tenure | 3 to 36 months |
| Disbursal Time | Within a few hours |
| Documentation | PAN, Aadhaar, Address Proof |
| Mode | Online/Offline (varies by lender) |
What Are the Rules for Applying for a Gold Loan?
Depending on the lender you will need to fulfill a couple criteria:
Gold Purity
A major portion of lenders will accept gold that has eighteen carats or more.
Loan-to-Value Ratio
You will be able to borrow roughly 75%–90% of your gold’s current market price.
Lender Age Limits
Almost all lenders will require you to be at least eighteen to borrow and have an upper limit of around sixty-five or seventy.
Documents
You will need: a valid identity proof (like an Aadhaar, PAN); and address proof and/or other documents depending on the lender.
Ownership Proof
You must own the gold you pledge and bring it for physical verification.
Purpose of Loan
Generally, the loan can be used for any purpose, but some lenders may have restrictions.
Why Choose Gold Loans?
Here are a few great reasons why gold loans remain a popular borrowing option:
- Quicker Processing: Banks will approve your loan within hours or days since gold is offered as collateral.
- Lower Interest Rates: You can find interest rates lower than credit card loans, or unsecured personal loans, that might have been taken otherwise.
- Flexible Repayment: You can do repayment via EMI payments or a lump sum repayment when the loan ends.
- Keep Your Gold: The gold you offer is still in your possession and it is only being pledged as security temporarily.
- Hassle Free: There is typically only minimal documentation necessary, just an identity proof and address proof will do.
- Widely Available: Banks and NBFCs offer gold loans, as well as many pawnshops, making it one of the easiest types of loans available.
Gold Loan Terms & Conditions
Key Terms and Conditions Which You Should Understand Before Taking a Gold Loan:
- Interest computation: Interest can be calculated on a flat or reducing balance.
- Repayment terms: Generally, you have both EMI and bullet repayments.
- Prepayment terms: Some lenders have a penalty fee to repay early, so check before you sign.
- Tenure: Generally between 3 months to 3 years.
- What if I default? Usually, the lender will auction your gold.
- Processing fee: This is a small fee that is charged during the loan sanctioning.
Process for Applying a Gold Loan
The gold loan process is easy, but there are clear steps involved:
- You present your gold and supporting documents to the lender for confirmation.
- The lender appraises your gold for weight and purity.
- From that appraisal, they will calculate the LTV ratio – Loan to Value ratio to determine the loan amount.
- The lender will then prepare a loan agreement, which you will sign.
- The bank will transfer the funds to the mode of your liking (e.g., bank fund transfer, cheque, cash).
How to Apply for a Gold Loan in Simple Steps
Applying for a gold loan is easy and simple:
Go to a lender or go online
Choose your bank, NBFC, or trusted gold loan lender.
Submit documents
Provide ID, address, and KYC documents.
Get your gold valued
The more knowledgeable team member will weigh the gold and check the gold purity.
Receive a loan offer
Essentially, based on the value of the gold pledged and your eligibility and income, the lender will then present an offer and offer terms of the gold loan.
Accept and disbursed
When you accept, the lender will (generally) disburse directly into your bank account.
Most lenders will now also offer the ability to apply for the gold loan online which makes this procedure even easier.
Gold Loan Renewal Process
Sometimes, borrowers will require extending the loan tenure longer than the agreed tenure. In most cases, lenders may offer you a renewal/extension option under such circumstances:
Renewal application
Before your dues date arrives, you will be able to apply and request for your loan to be renewed, provided you pay the total interest amount due.
Additional fees
Your lender may impose processing fees and/or additional interest charges upon renewal.
Avoid auction
Timely request and full renewal of loan means you will not have your gold auctioned off if you default on lending obligations.
Terms
Each lender offers different terms and options for renewal so please make sure you clarify your lender’s policy.
What Are the Gold Loan Operational Schemes?
Most lenders offer various schemes depending on what the borrower requires. Common schemes include:
- Standard Gold Loan: Fixed tenure and fixed interest.
- Flexi Gold Loan: Access additional funds or repay partially at any time when necessary.
- Gold Loan Against Jewellery: The most prevalent scheme whereby you can borrow against gold ornaments.
- Gold Loan Against Coins: Offered by a few lenders.
- EMI Gold Loan: Monthly installments are inclusive of the principal and interest.
- Bullet Repayment Scheme: Payment of interest monthly, with the loan principal payable at maturity option.
How to Apply for a Gold Loan Online in 4 Easy Steps
Lenders have simplified the process by providing online facilities about online applications. The process involves:
Filling an application form
You will provide your details on the website of the lender.
Upload required documents
You will not be required to submit your KYC documents in person; ID and address proofs will be uploaded digitally.
Measurement of Gold
An additional visit to a branch will be required to measure physical gold, or lenders might offer door-step measurement services.
Once the loan is approved, the funds will be credited to your account in a short time.
Considering a Gold Loan?
Get the money you need to purchase the things you want without needing to actually sell your gold. With the help of our experts, we can guide you to the right opportunities related to the various gold loans available, interest rates, and terms available to you – to ensure you make the best informed decision possible.
Speak to Our Experts and Choose the Right Gold Loan Now!
Frequently Asked Questions
What is the maximum amount of loan I am eligible for against gold assets or gold bullion?
This is dependent upon the purity of your gold and the market value. In most cases, lenders will give you 75% to 90% of the market value of the gold.
Am I able to use a gold loan for any purpose?
Yes, most lenders do not restrict the loan amount for specific purposes, so use it freely as you choose.
What happens if I default on repayment of my gold loan?
When you default on the repayment of your loan, the lender has the right to dispose of the pledged gold by auction to get back their dues.
Am I able to prepay my loan against gold?
Yes, however, you should verify with the lender if there is a penalty attached to the prepayment of your gold loan.
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