As much as one would like, there aren’t enough warning signs and cautionary symbols before emergencies, especially during medicinal ones. And loss or insufficient funds then is an added downturn which is why gold loans are granted immediately by the financiers.
Banks and Non-Banking Financial Companies(NBFCs) provide commercial services on a day-to-day basis for millions of customers. And loan lending is a humongous part of their service. These loans are typically classified as secured and unsecured. For example, a gold loan is secured and needs collateral(asset) pledging to avail it. The required collateral is physical gold that can be of any form. Chains, necklaces, bangles, earrings, coins, bars are accepted as collateral. The loan is granted for a certain period, known as the loan term or tenure. Till the sanctioned loan amount is paid with the owed interest, the bank or the financial institution doesn’t return the pledged collateral.
Besides, based on its security, a loan can be classified according to its usage. They are typically categorized as generic and specific-purpose loans. A specific purpose loan means the loan amount is usually availed for that purpose alone, whereas a generic loan can be used for any reason. Specific purpose loans include car loans, home loans, business loans, marriage loans, etc.
The customers usually take out the loan for a car, home, or business-related financial requirements in these loans. However, in generic loans, the loan amount can be used for any purpose, including medical emergencies. Personal loans and gold loans are some of these loans. Some gold loans provide loan up to Rs 1 crore with an LTV ratio of 90%. It can be availed using the online or offline mode and is convenient either way. By searching for a Manappuram Gold Loan Near Me, you can take out a gold loan from the nearest Manappuram Bank.
Advantages of a Gold loan
The processing of a gold loan is straightforward and convenient and unlike a medical loan or a personal loan that can also be used for medical emergencies. Gold loans are much more effective as they only require basic documents. An applicant of legal age with government authorized ID proof can avail a gold loan in a few hours without hassle. In contrast, unsecured loans like personal loans and medical loans have long lists of documentation requirements that must be validated before signing off on loans. Also, the three-digit score representing the applicant’s repayment capability is required in a gold loan. So, even with a low credit score, you can avail the loan rapidly. And income proof is not needed to avail a gold loan. These benefits make applying and approving a gold loan simple and innocuous.
Features of a Gold loan
The loan amount of a gold loan is evaluated based on the value of the collateral pledged. The gold’s value is determined by considering the purity, and the weight of the gold pledged. More the purity and the weight, the higher the loan amount. The purity of the gold must be in the range of 18 carats and 24 carats. The weight of the gold loan should be at least 10gm to avail a loan from a few banks and NBFCs. However, most authorized lenders accept gold article(s) of any weight. Additionally, banks and NBFCs also take the rate of gold on that day into consideration before deciding on its value.
The loan to value ratio of a gold loan is a maximum of 90% and is granted up to Rs 1crore in most financial institutions and banks. The interest rate of the gold loan starts from 7% per annum with a tenure minimum and a maximum tenure of 3 months and 36 months, respectively. The Gold Loan Interest Rate Calculator is available on the banks’ and NBFCs’ official websites for customers to calculate the interest rate and amount based on the required loan amount and tenure. The processing fee is charged for the processing and approval of the gold loan and is NIL in most banks and NBFCs. The prepayment charge is incurred if the borrower closes the loan account before the end of the tenure. The fee, like the processing fee, is NIL by most financiers.
Also read:- Why Gold Loans From NBFCs Are More Favored In Covid