Blog #Goldloanpergram

People nowadays opt for a gold loan as it is accessible quickly at low rates of interest than that of the Pawn Brokers. Gold loans are available by securing gold ornaments or Bank coins to a Bank or Financial Institution. The gold articles or jewellery pledged are protected with the bank and are paid back to the customers after the loan proportion is indemnified. For gold loans of Rs 25 lacs or more ITR and PAN card of the applicant is a must. And if the applicants’ annual income exceeds Rs 5 lakhs as per the Regulatory Guidelines, the Permanent Account Number or PAN card is compulsory. Any Indian citizen who attains the age of majority is competent to get a gold loan and required to furnish all essential documents to get the loan. In June 2021, Rs 4621 was the loftiest rate of Gold Loan Per Gram. According to the reports of the Reserve Bank of India, the aggregate loan disbursed by the commercial banks in India was almost Rs 21,645 crore till the second week of October. On 11th October the amount went up to Rs 97.9 lakh crore. The growth of gold loans also remained tepid till October 11. The credit growth on a year on year basis also dropped from 14.4% to 8.8%. Gold loan companies at times show meagre gain but remain stable due to the increasing price of gold in the Investment market.

A loan Mela announced by the government for 9 days in 250 districts across the whole country, was basically arranged to strengthen the consumption and to restore the demand for loans among the people. This Loan Mela was hit, and Rs 81,781 crore was disbursed by State-run banks within October 1-9 as announced by the Finance Secretary at a media conference in October. Gold rates and loan to value better known as LTV, have gone down by 16% and in the last quarter, there was barely any growth registered. Even there is a decline in portfolio around 4 to 5% but the underline collateral remains steady. The gold loan demand is pretty good and new customer acquisition is also steady. The gold loan business is doing satisfactorily, except 7 to 8% provisions in MFI. In India, nearly every bank delivers gold loans to their customers with interest rates varying from 7.35% to 12.5% and the lowest processing charges.

A Comprehensive Comparison Of Gold Loan Interest Rates In Various Banks Are Given Below:-

1. Punjab National Bank:- Punjab National Bank delivers a gold loan @8.75% for 12 months and the processing charges are 0.7% of the loan amount borrowed plus taxes.
   
   
2. ICICI Bank:- ICICI Gold Loan offers gold loan @9% for 12 months and the processing fees is only 1% of the loan amount. The bank offers no foreclosure charges with a very transparent application process.
   
   
3. HDFC Bank:- HDFC gives gold loan @ 9.5% for 24 months with 1% of the loan amount as processing charges.
   
   
4. Manappuram Bank:- Manappuram Finance provides a loan @9.9% for 3 months with Rs 10 processing fees to be paid at the time of settlement of the loan.
   
   Several alternatives are available to the applicants of gold loan to choose from according to their requirements and budget. Gold loans are risky as there are possibilities of the gold will be forfeited if timely the loan is not paid back so prior planning is a must before opting for the same.

Also read:- How To Manage Gold loan 

Here are few things to keep in mind before you avail a Gold loan:

1. The loan amount
The price of gold is constantly fluctuating. So, in order to obtain a gold loan, the loan value is calculated in a variety of ways. Some calculate the last two weeks' gold prices and then use an average price to determine the rate per gram of gold, whereas others use the daily rate to value your gold. Gold loan per gram gives you an estimate of the amount of loan you can get against your gold jewelry.

2. Rate of Interest
The rate at which you obtain the loan is one of the most important factors to consider when applying for a loan. The interest rate on gold loans is lower than the interest rate on personal loans. However, there is a distinction between the interest rates offered by NBFCs and those offered by banks. It is preferable to apply for gold loans through banks because their interest rates are lower than those charged by NB. Dena Bank Gold Loan Rate per gram is ₹ 3,506.

3. Short Term
Gold loans are only intended to be used for a short period of time. Typically, they provide a 12-month repayment period. Make certain that you will be able to repay the loan within the time frame specified. Gold loans are an excellent way to obtain immediate cash to meet emergency needs. One significant disadvantage is that it is not recommended to take out a gold loan because they can be risky if you are unable to repay them.

4. Credibility
In most cases, there is no evidence or paperwork received from a local vendor for gold loans. Gold loans are so quick that you may receive them much sooner than other types of loans. The lender will obviously feel secure because he has the gold as collateral in the event that the person does not pay back. However, you do not have to hold any guarantees from the lender, which raises concerns about the safety of gold.

5. Reimbursement structure
Explain every one of the questions in the agreements of the moneylender, to reimburse the credit prior to profiting one. Gold advances have an adaptable reimbursement structure when contrasted with some other credits. In each bank, the reimbursement design of gold advances may differ. In certain banks, you can choose paying the premium through EMI for the entire time frame and toward the finish of the residency, you can pay the chief sum and reclaim your gold. Yet, in certain banks, it's anything but so. You may likewise be approached to pay some piece of chief sum alongside interest in your EMI. Along these lines, it's smarter to comprehend the terms cautiously prior to profiting the gold credit. On the off chance that you are needing gold credits, know about all the above focuses any place you get it from. Ensure you pick the most solid and dependable individual for benefiting gold credits.

6. Tenure
The gold loan usually has a short term ranging from 12 to 48 months. As a result, before taking out a gold loan from any lender , make sure you know your repayment capacity . Because missed payment will have an influence on your credit score and you may be subject to additional fees. So bear this in mind while deciding on the length of your gold loan and the mode of repayment.

Also read this: Falling short of money? Consider a Gold loan