How to take a gold loan? – Most of the family in India has a gold article lying idle in the lockers. In any case, fortunately, they can be effectively utilized when you need it the most. When in an emergency requirement for money, you can use your gold article to support your quick money necessities. The gold loan can be taken by any of the banks online such as Manappuram gold loan online, SBI bank gold loan apply and many more taking loans on gold. Not by selling your gold, however by promising it to a loan institute. There different banks and NBFC across India that offers gold loan to their clients at attractive loan costs. Before applying for a gold loan you are supposed to know about the methods, benefits, and demerits.
What is Gold Loan?
A gold loan is a type of secured loan against gold jewelry giving you loan amount according to the market value of gold, with an EMI choice to repay the same. With the choice of helping instant for a gold loan at low-interest rates in India, it is a fast and simple method of meeting your financial needs today.
Method for apply gold loan
The method of gold loan starts from one loan specialist than on to the other. The possibility of a gold loan is simple; you pledge your gold article and get the loan amount in lieu. For gold loan apply, you have to visit the loan institute with the gold you need to pledge and the necessary records and after that fill the gold loan application. The loan specialist performs gold purity checks and decides its weight based on which it evaluates its market value. The gold loan can be authorized up to 80% of the calculated value of the pledged gold. When the estimation of the promised gold is assessed, the records are checked And when everything is appearing to be acceptable and promising to your moneylenders, they approved your loan.
These days, gold loans apply online also through the banks or NBFC mobile application or from official websites. In any case, applying for the gold loan online does not imply that you will not visit your loan specialist. To benefits the facility of an online gold loan, you will have to visit your money lender at least once to store your gold articles. When this is done, you can register at the loan specialist’s customer portal or mobile application and link your bank account with it. So in the future at whatever point you need money urgently, you can apply for a gold loan and get accessible credit dispensed in your bank account anytime anywhere in just a few minutes.
Advantage of gold loan
- Fast processing- The Gold loan is secured and accordingly includes easy-going eligibility criteria and minimal documentation. It does not require a credit score for loan approval. Therefore, moneylenders generally dispensed the loan can even get the loan amount in just a few minutes.
- Lower interest rates- As compared to unsecured loan such as personal loan, a gold loan which is secured loan, charge a lower interest rate. Likewise, if a person attaches another benefit as insurance, the gold loan interest rate can be lowered down further.
- No processing fee- Numerous banks and NBFC demand zero processing fees on gold loans. Regardless of whether a bank charges a processing fee, it is usually 1%.
- No foreclosure charges- A few moneylenders don’t require any pre-installment charges while some of the banks do charge a pre-installment penalty of 1%.
- Income proof is not needed- Moneylenders, usually don’t ask for a salary verification in the gold loan as the loan is secured against gold. Therefore, anybody can apply for a gold loan in the case of earning or not.
- The credit score is not required- Unlike, gold loan approval doesn’t depend upon your financial assessment. If there should be an occurrence of different loans, the loan amount is given based on the repayment limit and record as a consumer of the borrower yet in the gold loan, the loan amount is decided on the market estimation of gold.
A disadvantage of gold loan
- Loan to value ratio- In a gold loan, you get a specific level of the market estimation of the promised gold as the loan amount. The loan amount is chosen as the premise of the LTV (Loan to Value) ratio. This ratio varies from loan specialist to bank and goes up to a limit of 80% of the estimation of the pledged gold. This implies if the market estimation of your gold is Rs. 5 lakhs, you can get a limit of Rs. 4 lakhs.
- Due to loan default, you can lose your gold- If in any case gold loan default, moneylenders have the legal option to freeze your benefits and sell it to get the exceptional gold loan amount.