With Gold Loan, you can borrow money using your gold jewelry as collateral. In other words, you will continue to store your gold jewelry with the lender, who will then allow you to borrow money against them. You can return your gold to the lender by repaying the loan in full within the specified time frame. You aren’t permitted to borrow the total amount of the gold’s value, though. Loans from lenders are often limited to a particular portion of the gold’s purchase price.
A loan against gold, however, makes a lot of sense if you have a financial emergency or want to take advantage of a lucrative investment opportunity. A tool created just for your application process is the Gold loan calculator.
In a financial emergency, the best action is to take out a loan on your gold jewelry if you have little cash and no savings. It’s a quicker way to get the quantity you require. However, the Indian gold loan procedure can be intimidating for a first-time borrower. Utilize a gold loan calculator to determine the value of your gold and the loan amount that could be secured by it based on the forms (gold coins, jewelry) and carats that it takes.
Here is all you need to know about obtaining a loan in India against your gold jewelry, including the necessary paperwork and how to open an account.
Steps to Get A Loan Against Your Gold Jewellery
Step 1: Pick a Reputable Finance Company
Many financial institutions (banks and NBFCs) in India provide gold loans against gold jewelry. These institutions charge interest at 7 to 29% a year, depending on the borrower’s creditworthiness and credit rating.
Selecting a reputable organization to start the gold loan process against your valuables is advised because you’ll avoid paperwork problems and processing delays.
Step 2: They’ll check your gold’s purity
Following your selection of a gold loan provider, they will start processing your jewellery loan by having their jewelry specialists at the institution’s physical location or your house confirm the gold’s purity. The individual handling your gold loan procedure should ensure the purity of at least 18 karats.
Step 3: Submit the necessary paperwork
PAN cards, Aadhar cards, driver’s licenses, and other documents that serve as proof of identity and address are required. You will need to provide affidavits from three people guaranteeing your loan repayment or enough guarantors in the absence of collateral.
Your loan application will be accepted after the documents are verified. Up to 80% of the estimated value of the gold pledged might be taken for gold loans.
Online Gold Loan Application
You may typically apply for a loan online or through one of their mobile applications from gold loan providers. You can use this by providing basic information about yourself, your financial condition, your history with the bank, and your jewelry, including the type of jewelry you have, the kind of gold it is made of (24k, 18k, 14k, etc.), the weight of each item, and an estimate of its value.
You might need to upload photos or physically deliver your items to their branch to verify and deposit them. Following approval, you can often receive the money in your bank account within 24 hours.
A Few Crucial Considerations When Taking Out A Gold Loan
After determining the value of your gold, choose the amount and duration of the loan. You can also use internet lenders who offer loans against jewelry for a nominal 5% interest rate that varies based on your credit score. To avoid losing access to your gold jewelry if you can’t make the repayments on time, you must submit all the required documents for the gold loan.
How much are you able to borrow?
A loan against gold jewelry is a brief loan with a maximum one-year period. To offer borrowers greater convenience, lenders offer gold loans per gram. They each have a minimum and maximum amount they can borrow. Most lenders typically provide gold loans ranging from Rs to Rs for up to X months.
The interest rate on loans secured by gold typically ranges from Number% to Number% annually. Nevertheless, it can be more expensive depending on the lender you choose.
Qualification for a Gold Loan
A loan secured by gold is subject to stricter eligibility standards than other types of loans. You must be the ornaments’ legal owner and be 18 years old. With these loans, banks are not required to consider variables like your salary, age, credit score, etc., because you will be maintaining your jewelry as security for the loan amount.
What kinds of gold jewelry are acceptable as pledges?
Most lenders only accept gold jewelry with a purity of 18 to 24 carats. Some lenders also take 24-carat gold coins with a 99.99% purity level. The weight of a gold coin is limited by the Reserve Bank of India (RBI) policy to X grams.
One of the easiest methods to get extra money for emergencies is a loan against gold, which offers competitive Gold Loan interest rates, instant approval, and a few documentation requirements.