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

About half the population in India have safe boxes in their houses filled with nothing but gold. And that gold is the key to have many more of those lockers. The most straightforward and first step in that process is availing of a gold loan. How can a gold loan make me rich? It is a  good question with the most apparent answer. You use the loan amount to start a new business or expand one or invest in one, the options are endless, and when the money is back with profits, you can pay the loan amount with interest and have your gold back. It is as simple as that.

And especially now during this highly conspicuous spread of disease, the money has more possibilities to save you than the other way round. Banks and NBFCs now respond to their customers more fervently and are servicing in the most plausible and pleasurable way. With the advance in technology and the inventions of new machinery, you can avail of a gold loan from anywhere in the world using the internet and a cellphone. A gold loan requires the least amount of documents. All it needs is ID proof, photocopies of the applicant and the gold asset. Unlike many other loans, a gold loan doesn’t need income proof. 

Anyone can avail of it, no terms on the vocation of the applicant, no need for employment proof, bank account statement and most importantly, no CIBIL score necessity. CIBIL score is a three-digit score ranging from 300 to 900 and is considered extremely important for taking out a loan. But for a gold loan, and the bank or financial institute grants money even if you have a low or bad credit score. Although after availing of the loan, maintaining the score is a pre-requisite for future loan possibilities.

 Banks and Non-Banking Financial Companies(NBFCs) offer a gold loan with affordable interest rates and a maximum loan amount for a short tenure. The loan amount depends on the rate of gold on that day and its purity and weight. The gold rate today is Rs 48,620 for 10kg of 24-carat gold. The repayment options are flexible and exceedingly convenient. The loan is general, and therefore, the bank or NBFC doesn’t question you regarding its purpose. It can be used for medical emergencies, weddings, educational purposes, vacation, parties, business, construction, renovation and many more. 

Moreover, a gold loan offers a loan moratorium for three months if the applicant is in a highly challenging financial situation. During this period, the borrower doesn’t need to pay the interest amount. Still, they are only eligible for this facility if they’ve paid all the preceding instalments on time and have a healthy relationship with the bank. This facility is incredible and helping in this pandemic.

Bank of India gold loan is acclaimed for its best deals and offers in the market. The bank offers up to 90% of the gold’s value as the loan amount. The interest rate for hallmarked jewellery and coins in BOI starts from 7.35% per annum, and for regular jewellery, the interest rate starts from 7.40%. The margin of the gold loan for agricultural purposes is 15% to 20% and for other purposes is 25%. The bank also offers many repayment options such as yearly, monthly, quarterly, or bullet scheme payment depending on the borrower’s income.

 Conclusion
Availing a gold loan is effortless. The processing is easy, and no need for excessive documents. But one shouldn’t forget that a gold loan is a secured loan, and paying the monthly instalments on time is colossal. Moreover, the bank or NBFC has the right to auction your gold if you aren’t paying the interest amount for three months consequently.

Must Read:- Offline Gold Loan Approval Process