Gold loan is when the bank takes your gold as collateral for the period of the loan. Bank charges an interest rate and gives you a time period to repay the entire loan and then you will get your gold back. You can pledge your gold ornaments and jewelry for funding your financial emergency.
Gold loan is fully secured, you only have to pay processing fee, late payment charge, valuation fees etc. There are ways to repay your loan amount. You can repay your loan amount through equated monthly installments. The second way is the payment of interest upfront and repayment of the principal loan amount at the end of the loan tenure.
Third way is to pay the interest on a monthly basis and repay the principal loan amount at the end of the loan tenure. Documents required to take gold loan are duly-filled application form, passport size photographs, identity proof, address proof, signature proof, PAN card, proof of age, post-loan disbursement Documents, if any. The amount that you receive will be based on the value of the gold that you pledge.
Gold loan in India is the best option for Indians to use gold for their urgent cash requirements. Most of the Indians have gold articles lying idle in their lockers. Even if you have a low credit score, you can get a good amount of gold. India is the largest consumer of gold in the world. To increase gold investment options for Indians, the Indian government recently approved the gold monetization and gold bond schemes announced in this year’s budget.
For Indians gold holds a certain sentimental value. For today’s generation gold has been the mainstay to fund our urgent monetary requirements. Gold is a commodity whose value has been increasing constantly. Gold loan provides the perfect opportunity to utilize the gold. It is better to use your gold ornaments instead of paying a higher interest rate on personal loans. But if your jewelry doesn’t bear the “hallmark sign” then the valuation of your gold will be untrustworthy and you may end up getting a lesser amount than the value of your gold.
There are some Do’s and don’ts of gold loan: –
- The former offer better interest rates and the NBFCs can charge higher amounts. You should always go with the bank.
- The minimum purity that a lender accepts for a gold loan is 18 carats.
- In the case of coins, they may ask for higher quality.
- Most lenders don’t prepayment charges and if they charge, they are around 1% of the outstanding loan.
Gold loan calculator helps borrowers to calculate the capital which they will get in lieu of their gold article depending on the cartage of the pledge gold. Recently, I have calculated my capital for taking a loan against my gold article in rupeek.com. Rupeek gold loan calculator provides accurate results in no time on entering a few important parameters. I will definitely suggest you to check rupeek gold loan calculator if you are looking for a gold loan.