Blog #GoldLoanInterestRate

• As compared to other options, such as a personal loan, gold loans have a low interest rate.
  
  
• A gold loan will last anywhere from a few days to five years, and it's extremely flexible.
  
  
• For gold loans, many banks and non-bank financial institutions (NBFCs) do not charge a prepaid fee.
  
  
• You must have the bare minimum of documentation to be eligible for this loan.
  
  
• Also, the loan is simple to repay.
  
  

You must meet the following eligibility criteria to make use of a gold loan:

• The legal age to get a loan is 21 years old.
  
  
• The maximum age limit is 65.
  
  
• Amount of Credit: A gold loan of up to Rs 20 lakhs can be obtained from any bank.
  
  
• Job Requirements: Because of their jobs, all people are eligible for gold loans. A gold loan would be available to salaried employees, self-employed staff, and even housewives with no income.
  
  
• Gold as a protective measure: The gold should be between 18 and 24 carats. Over the last 30 days, the average price of gold has risen to 22 carats. Gold bars and coins with a purity of 18-24 carats may be used as ornaments.
  
  
• The CIBIL Score's requirements: CIBIL does not require the receipt of a gold loan.
  
  
• Documents required: You must also have evidence of your identity and address. A gold loan in India does not require evidence of income.

For an Urgent requirement :

A farmer, for example, may be unable to enter the market correctly due to a variety of circumstances, thus restricting his or her market opportunities. As a result, to prevent a minimum loss, it must sell its stocks as soon as possible. Gold loans are the best choice because they don't require any investments or sales and have the lowest risk and highest level of security. The person only needs to reevaluate the credit service provider's gold, and one of his most important responsibilities is to compare and track prices against competitors, which will save him a significant amount of money in the future. Many citizens would likely be unable to do so. Occasionally, people do not have enough money or are in a financial bind at the time when a gold loan will be most useful. Gold loan interest rate is affixed by the lending institutions and banks while obtaining loans. 

 Credit score :

 Many people are looking for gold loans that can be used for a short period. The gold loan is used to check for and apply for larger loans in the short term, as will be seen shortly. A tiny, short-term gold loan would be easier to repay, and no further defaults will improve the consumer's or borrower's credit scores. Since the interest rate is lower and the payments are also small, there is a danger of making the credit value acceptable when restructuring. Assume that anyone has missed a bill or installment. There will be an impact on the credit score, which will continue to decline, and if a short-term loan is required, the credit score will suffer.

Jaipur is the capital of Rajasthan and one of the state's largest cities. In the region, gold has always been in high demand. Residents of the state have often been fascinated by gold and other similar ornaments. The gold rate in Delhi has followed the global gold rate. The present interest rate per gram is Rs 4675.

There are a plethora of gold loan options open, as well as a plethora of gold loan lenders. It is important to set aside some time to locate the ideal lender. The rate on a Bank of Baroda gold loan is extremely low. As a result, bank is a viable option for a gold loan.

Must Read:- Is it a good time for a Gold Loan? Here is all you need to know. 

The gold loan application process :

Gold loan application involves the submission of detailed information by the borrower. The application form can be filled online as well as by visiting the bank. Gold loans are one of the most uncomplicated and most straightforward methods to leverage your gold and obtain funds. Anyone who has gold, whether in jewellery, coins, or bars, is eligible for this loan. One has to abide by the eligibility parameters to acquire a Gold Loan. 

Why is document verification necessary?

An individual is asked to submit KYC documents for verification purposes where the credentials are verified. Identity and residency proof, as well as two passport-sized pictures, are mandatory. This process is necessary to avoid cases of fraud. If the fraudulent activity is detected during verification, then the loan application gets rejected, and strict legal action might be taken against that particular individual. The photocopies of the following documents have to submit for document verification. 

1. Aadhar card, ration card, utility bills, passport, PAN Card, Renter’s agreement can be submitted as Residence proof.
2. Aadhar Card, Driving License, Voter ID, Passport can be submitted as identity proof. 

What does the purity test of gold signify? 

The purity test of Gold analyses the composition of gold along with impurities. The impurities make the weight of Gold more, so it is essential to evaluate it. This test is significant in assessing mortgage jewellery, and the loan amount is determined based on gold’s worth after the purity test.

How is the interest rate evaluated in Gold Loan?

To get the best interest rates, you must negotiate. Gold loans often have lower interest rates than personal loans since they are ensured, whereas personal loans are insecure. Because they have a higher cost of financing, NBFCs usually charge a higher interest rate than banks. In most occurrences, the Gold Loan Interest Rate is between 13 and 15%.

What happens to the mortgaged gold?

The mortgage gold is safely kept in bank lockers marked with a unique application number mentioned in the borrower’s approval letter. This gold is sealed in the bag and kept in safes by bank authorities. The gold is safe-keeping until the end of the loan term.

 When is the gold liquidated or auctioned?

When the borrower fails to repay the amount in a given time frame, then at such times, an ultimatum is given to the borrower of two weeks to make the repayment. If the borrower fails to repay in the given extended timeframe, liquidation or auction is done. Banks compensate the outstanding amount in whichever way it is suitable for them.

 Can the gold loan be acquired on ancient jewellery?

It is commonly believed that loans can’t be acquired on ancient jewellery or heirlooms. This is entirely false as a gold loan can be obtained on any jewellery weighing above 18 carats.

 Is the lender's credibility important? 

It does so because you keep your gold there. The lender will feel confident since he has the gold as collateral if the borrower does not pay its interest rate back. However, the value of your gold exceeds the loan value, and there is no assurance that you will receive the gold back. Before approaching a lender, conduct background checks and become familiar with the security procedures in place. Therefore Manappuram Gold Loan is a good option for obtaining a Gold loan with less incurred interest rates.

 What happens after successful debt consolidation?

When you complete the loan repayments, the bank issues a loan completion letter in your name and tour gold valuables are safely returned to you thereupon.

 What are the tenure period and repayment options of Gold Loan?

Because a gold loan is a short-term loan, its tenure duration is shorter than other loans. The tenure period is usually 6-12 months. The borrower doesn’t need to be the bank’s existing customers to avail of this loan. The repayment can be done from another bank to Manappuram bank for loan repayment. The repayment options such as Standing Instruction, Debit mandate, post dated cheques. 

Gold loans are the best option if you want to get an accessible fund in a short amount of time. It is the safest investment option for getting an excellent value for your gold ornament.

There are a lot of benefits to applying for a gold loan. Some of them are listed below:- 

1. Processing:- As a gold loan is a secured loan, you give your gold against the loan amount. So here, the gold will act as a security, so banks usually dispersed these types of loans very quickly. The documentation process is not very lengthy. You just have to fill a small application form and attach some documents like an Aadhar card, pan card or passport for the verification process. You don't have to wait for a long time to get your documents verified, banks only take a few minutes to settle all the paperwork, and once it's done, they credit the loan amount to your bank account.
    
2. Interest Rate:- The interest rate for the gold loan is comparatively less than personal loans. The range is usually between 7% to 13% p.a. you save a lot of money here because the Gold Loan Interest Rate is low. Some banks allow you to pledge any other asset that you have as collateral, it will definitely help you decrease your interest rate even more.
   
   
3. Repayment options:- Banks give flexible repayment options to the customers. There are some unique options like 'interest only' where you just pay the interest rate that occurs every month, and you pay the whole principal amount at the end of the tenure. There are many other options like this available. The tenure usually ranges from 12-48 months, but you can extend it if you have some financial constraints. It is generally recommended to choose a shorter tenure for a gold loan because you might end up paying more interest than your loan amount.
   
   
4. Processing fee:- Most banks like Corporation Bank gold loan or State Bank of India gold loan don't usually charge a processing fee for gold, but if they do, it's generally 1% of your loan amount, which is very affordable and less expensive. But many banks and Non-Banking Financial Companies don't ask you to pay any processing fee because the process of gold loaning is quicker, and they have your gold as collateral.
   
   
5. Income proof:- Unlike a personal loan, you don't have to submit any income proof to show that you're eligible for this loan. This feature makes a gold loan attractive because it allows everyone from an employed salaried person to an unemployed housewife to apply for this loan.
   
   
6. Credit Score:- If you have a low or bad credit score, then your application for any other loan can be rejected, or you'll have to pay a high-interest rate to avail of that loan. But that's not the case for a gold loan, and here you don't have to show your credit score to avail of this loan. You can get a gold loan at a low interest rate even if your credit score is low.
   
   
7. Anytime liquidity:- You can get this loan anytime, and the bank will just need 5-15 minutes to complete the whole procedure. So you can quickly get cash against your gold anytime and within just a few minutes.
   
   
8. Flexibility:- You can use the money you get from a gold loan anytime and anywhere. Unlike car loans and house loans, you don't have to use them for one particular situation particularly. You can use it for different purposes simultaneously, and you are not reasonable to anyone about your expenses. This gives you complete flexibility over the money you get from a gold loan so that you can use it for different purposes like wedding, medical expenses, vacation, debts, buying an asset or for a child's education.

Conclusion: There are a lot of advantages to applying for a gold loan. And you can apply for a gold loan anytime you want. The basic requirement is pure gold. But you'll have to be careful while paying the instalments because if you fail to pay the loan amount or the instalments, then the bank will seize your gold and sell it to cover up the loan and the interest amount.