What is gold loan?, how to take gold loan and how interest is charged

What is gold loan?, how to take gold loan and how interest is charged

Most of the people tend to buy gold, it is hobby in some sectors and hoard in other sectors. Many people buy gold when they have extra money, and when people need money in times of trouble, this gold comes in handy. Nowadays, loans are available very quickly with gold. And this gold-loan is very secure. There was a time when common people used to borrow gold by depositing gold from nearby gold shops, these shops offered very high interest rates. As a result, common people were in a lot of trouble. But at present NBFCs provide loans to various banks including national companies. In this field, common people deposit gold and get loans very easily and in exchange of low interest.

Rules for availing gold-loan-

Gold prices have increased a lot, the demand for gold-loans has been increasing since last few years. NBFCs provide loans or loans to your gold deposits from various banks including national companies. This gold-loan is very easy to get. Instead of loan or loan, gold is deposited as collateral, this loan is very secure. Gold is verified before giving loan. The amount of loan or loan you will get depends on how good or how many carats the gold is. The Reserve Bank of India (RBI) relaxed LTV conditions earlier this fiscal. As a result, banks are allowed to lend up to 90% of the value of gold.

Gold loan vs personal loan -

When people need money suddenly, most people take personal loans from banks. A lot of interest has to be paid in this sector. You can take a low interest loan by depositing gold jewelery or coins at home in that area. But the interest rate is very high. In such a situation, if you have gold coins or gold ornaments, you can arrange money for your needs at low rates.

Maximum loan amount available –

You can get a loan from the bank up to about 50 lakhs or more. There may also be changes depending on the organization. How much is the interest rate on gold loans – Interest rates are different in different banks. Gold-loan interest in banks is between 7% and 8%. Also in NBFCs the interest can be 12% to 15%. However, interest rates may change. A processing fee is charged along with GST tax. The principal along with interest has to be deposited in installments from the month following the month in which you take the gold-loan. Also many benefits are provided by different organizations of different types. Gold loan can be disbursed in monthly EMIs, bullet repayments and installments. But it may differ by organization. Some companies also offer overdraft facilities.

Documents Required for Gold-Loan –

A few papers are required to take a gold-loan. The identity and address proof of the person taking the gold-loan is required. Like Voter Card, Aadhaar Card, PAN Card etc. Also two copies of photo are required. Income tax papers are not required in this sector. If you don't have PAN, you may be asked to submit Form 60.

Finally, it can be said that gold-loan or loan is very easy to take if needed and more beneficial than personal loan.