Each loan has particular conditions that require it to be fulfilled to get the loan. Most loans have similar kinds of conditions that need to be fulfilled despite a few of the characteristics such as the loan amount, LTV ratio, tenure of the loan, etc. That depends on the category of loan one avails.
Nearly every bank and lender in every category of loan expects the borrower to present their papers. Apart from that, the borrower should also have a good credit score, but there appears to be one exception in gold loans. A Gold Loan is a type of loan that does not need the borrower to submit a good credit score before banks and lenders. Yet, It is vital to have a good credit score when applying for any other type of loan. Still, in the case of a gold loan, it does not hold any significance because they are short term secured loans supported by collateral or security, which simply means that you ought to deposit your gold to get the funds for the loan for which you guarantee your gold. Usually, people opt for gold loans to enhance their credit score as they are short term. Moreover, with a low rate of interest, they are simple to pay back. Therefore, a minor mistake in credit score can be enclosed in gold loans as collateral is the central aspect contemplated there.
Therefore, banks and lenders don’t ask for good credit scores as it does not hold that much importance compared to the credit score requirements in different categories of loans.
Value of gold :- This is an essential characteristic in obtaining gold loans as you can get the amount of loan relying on the gold that you pledge as the banks and lenders examine the value of the gold that you deposit along with certain other documents then permit you a loan of the amount against the gold that the borrower has deposited. Moreover, it is valuable to know that banks only lend you up to 90% of the value of gold that you have promised, and the prices of gold prevailing at that period are evaluated. So, one should remember these things to distinguish the prices of gold before going to get a gold loan.
Interest rates :- Gold loans are relatively simple and beneficial types of loan which have a highly adjustable rate of interest that can vary between 9%-27% and can be fixed depending on the borrower and their respective lender or bank. You can also evaluate your monthly instalments before selecting the rate of interest. Accordingly, after looking at the monthly instalments according to your loan amount, you can select a rate of interest for your monthly instalments. You can also check the SBI Gold Loan Per Gram to get to know the various offers you can get and the flexibility available to you when you apply for a gold loan.
These are a few of the characteristics that come in handy when you go for availing of a gold loan, as these are the essential characteristics that need to be evaluated. You can even apply for a gold loan simply by sitting at your place without visiting a bank branch by just checking the bank’s online website and filling the application form. You do not need to visit the bank branches to get each and every process approved from the banks. This makes the gold loan process very easy and convenient.
Also Read:- Everything About Your Online Gold Loan Application