Blog #Gold Loan Calculator

If a person has an emergency medical bill to settle and needs Rs 5 lakhs, and if he faces a shortage of Rs 3 lakhs, then taking a gold loan can be a good alternative. If the person already has a good bond with the Bank, then the bank relationship manager can help by giving an unusual gold loan scheme that can save a good amount of money. The bank can offer the remaining amount to the person if he surrenders the locker he has with that Bank and thereby apply for a gold loan. The surrender of the locker can save annual locker charges of at least Rs 8000 and can supply him the amount that he requires to meet his expenses. The person used the locker to keep the gold safe; now, he can get a gold loan instead of it.


After the covid-19 pandemic struck, gold loans have become vastly popular among the masses even after the prices of gold touched Rs 50,000 per 10 grams. Observing the appetite for Gold loans in the Indian loan market, the Reserve Bank of India also permitted the Banks to deliver gold loans to their customers at an enhanced loan to value ratio. The RBI allowed the loan to value ratio against gold loans at 90% of the value of gold pledged until 31st of March 2021; it again came back to the conventional 75%. Enhanced loan to value ratio means getting an additional amount of loan against the exact amount of gold.


A bank locker is considered a safe storage place for multiple items, mostly assets like gold ornaments, diamond jewellery, articles or jewellery made of silver or legal documents like a will or insurance policy. Gold loan against Bank lockers can also be forfeited if the person fails to repay the loan. The banks can have the malafide intention of taking away the accumulated Gold jewellery of a middle-class borrower. A person holding a bank locker needs to expend a nominal amount as annual rent. In contrast, in a gold loan, the liability of paying the loan back cost heavily upon the borrower.


Sometimes the lending institution can offer gold loan overdraft schemes at nominal processing fees and even facilities like pay only interest when a customer utilises the overdraft facility. The interest rates on gold loans can start from 7.4 per cent, and the monthly instalment that a person needs to give against a gold loan every month can be evaluated in a gold loan calculator. If a person does not use a credit facility, they benefit from paying less to the bank against the locker charges if he had used it to store his assets, especially gold.


Banks generally push the customers to have a gold loan scheme in the bank overdraft facilities where a person needs to keep their ornaments secured with the bank to take a gold loan overdraft facility. This further provides insurance on the pledged gold and saves the cost of renting an individual locker. But many customers fall into a debt trap when they give up their locker facility and take credit lines from the lending institution. On the other hand, Manappuram gold loan rate or gold loan from any other bank has numerous benefits and flexible repayment options that can be profitable compared to a gold loan against a Bank locker. If the borrower defaults in paying back the loan amount, it will not only auction off the pledged gold jewellery but also hurt the borrower’s credit history. The banks will make good of their loss if a loan turns into non-performing assets through this auction. The experts always recommend getting a gold loan only if there is a financial emergency, as the jewellery pledged does not have any utility value.

Also Read:- Why is the Gold loan profitable? 

Gold is used by the majority of India's 80 per cent population. If a crisis or emergency develops, most people's gold is readily available, allowing them to receive immediate aid as well as financial advice from any bank or financial institution. There are a few distinguishing characteristics that set it apart from other types of loans.  The factor is the valuation of the gold immediately taking the gold to the particular bank, or any financial institution does not mean that will get the amount of the loan on the whole of the amount of the gold. Then we'll have a reservation of the gold done by the institution or the bank. About 90% of the value of the gold can be available as a loan. Until the valuation of the gold is done, the person can't be clear or have clarity on how long at what particular time one will need to pay. Muthoot gold loan is providing gold loans at the rate of 12 % per annum to 27% per annum.

Gold's value has increased faster than stock markets on several occasions, and it has even been able to outperform the economies of some of the world's most influential and stable nations. If you need money quickly, there are several options open to you. People frequently consider taking out short-term loans or even selling property to obtain liquid assets. Few people, however, want to sell gold for cash because it is an asset whose value is projected to appreciate over time The credit score is a credit rating score of a person who is availing of any financial assistance from any bank or any financial institution. It is said that if the credit score of any particular person is around 700, then the chances of getting a loan or even the chances of getting a gold loan are much higher. If the amount after proper time there is no issue of negative credit score but will have a positive credit score instead. 

On the contrary of the fact if someone is having a credit score below 650 or 600, one needs to avail of the small amount of gold loan accordingly at the proper time. In this way, the credit score not only will be improving but also if somebody has no credit score or not a single transaction of any credit is there then also can make some credit score. The lender is always safe if they have some collateral, and they do not need any formal statement of income. The borrower believes that they must repay the loan amount and that if they do not, the lender will seize the borrower's valuable possessions. He makes every effort to pay this EMI on time to reclaim his possessions on time. Before offering you a loan, a lender wants to be sure you'll be able to return it. As a result, many of them need to be protected in some way. Collateral is a sort of security that helps lenders lower their risk. It makes sure that the borrower honours their financial responsibilities. If the borrower defaults, the lender has the option of seizing and selling the collateral, with the revenues going toward the loan's unpaid balance. Gold Loan per gram is based on the total weight of the gold jewellery (except the stones on the piece), level of the gold purity, the preceding one-month average price of 22-carat gold and LTV ratio applied by banks and this is calculated by the Gold loan calculator.

Finally, gold loans offer a variety of advantages, including low-interest rates and tax advantages. When a person takes out a gold loan for house repairs, he has the option of taking advantage of income tax restrictions.

Read More:- Loan Disbursal Process Of Gold Loan 

The way financial institutions make money by providing money. These companies lend the public credit and charge the repayment for this service for a specific interest rate. A gold loan is one of the best ways to raise money quickly in the modern credit system.

The Gold Loan (also referred to as the Loan) against gold is a loan secured to the creditor by pledging its gold (18-24 carats) items as collateral. Based on the market and gold quality, A specific portion of gold shall be the credit amount provided, generally up to 80%. During urgent events such as job losses or business losses, you can apply for gold loans. You can get your gold converted into small ornaments and avail of short-term loans on them. In the past few months, the prices of gold have also increased significantly. RBI has increased the LTV on non-agricultural loans from an earlier limit of 75 percent to 90 percent.

Gold loans are secured loans that require you to maintain your physical gold as collateral to your fund requirements as jewelry or coins. It is considered to be an excellent alternative to demanding short-term money.

Many financial institutions provide a gold loan at a different interest rate and they provide a Gold loan calculator facility as well. The loan-to-value ratio varies from one institution to another, providing up to 70 percent of others’ total value. There is also a low processing fee for a gold loan regarding a certain amount of the actual loan. The tenure period also varies between businesses. You choose your gold credit per gram value in terms of gold quality, the best one being "24-carat." 

Some other essential factors in the process of gold loans are :-

Start-up companies :- 

It is rather difficult for new companies to raise their finances, as they are new and lack goodwill. Before they even compete, several start-ups fail just because they are out of the fund. While it is risky to lend money to such companies, a gold loan is no risk for the lender, and therefore your repayment capacities should not be proved. A gold loan would be an excellent way for a start-up company to raise money.

Personal or family-run businesses :- 

Like start-up companies, it might be somewhat tricky for entrepreneurs in India who run their own private or family businesses to receive loans. As lending to a small company owner has little security, the lenders are reluctant to provide these people with loans. The application of a gold loan is, therefore, once more, one of the best ways to raise finances.

Agricultural business :-

Farmers are our daily source of broth and butter, but most farmers are still lacking. A farmer’s gold loan may not be the best choice, but if there is no other way to raise funds, then gold loans should have opted. One can use this money to buy livestock. Most people, Odisha, like to buy gold. People of all classes in Odisha are involved in gold purchases and use gifts in numerous festivals, family features, and marriages. Gold Rate In Bhubaneswar is Rs 4110.

What happens when you have dues in the loan?

The actions taken by the lender for defaulting in gold loan differs for each lender. For the overdue period, some lenders charge interest, usually higher than the customer's loan. Another loan default will lead to a message informing you about the time you will have to clear your obligations. Your obligations. The unpaid loan can also lead to lenders auctioning your gold items to recover their outstanding credit amount at the final notice date.

Muthoot Finance Gold Loan per gram details are stated below :

Farming purpose: 15 lakh (payable within 18 months) for a limited period against hallmarks of gemstone and gold Coins: 7.35 percent (Max 50 gms)Against Normal Jewelry: 7.40%.

Also Read:- GOLD LOANS VS CREDIT CARD 

A secured loan or secured debt is when the borrower has promised to give the moneylender certain belongings (assets), such as a car, gold jewellery or coins, if the borrower defaults on payments, i.e. fail to repay the money. The lender has the right to confiscate the belongings and sell them to recover the loss.

The property the borrower puts up as security is named as the ‘collateral’ on the loan.

If after selling off the collateral the amount does not cover the debt amount and interest amount, the lender may try to get a deficiency judgment against the borrower for the money needed to cover the loss that the lender couldn't recover.

Why is Gold Loan secured Loan?

1) A person seeking to get a Gold loan has to put up the Gold as collateral so that if the person is unable to pay back the amount, the Gold (ornaments or coins) can be sold to recover the loss thus making it a secured loan.

2) Moreover, since 100 per cent of the value of the Gold is not given off as a loan, even if the borrower defaults, the moneylender can recover the interest amount as well by selling the Gold.

3) Banks usually give 75 per cent of Gold's value as a loan whereas the Non-Banking Financial Corporations give up to 90 per cent of the value of the Gold as a loan.

4) But the banks offer loans at lower interest rates while the NBFCs charge higher interest rates. So it highly depends upon the amount you are willing to avail as a loan and the Gold you have or you are willing to pledge against your loan. There are a lot of secured loan products on the market such as HDFC gold loan, IIFL Gold Loans etc. which are offered at low-interest rates.

5) In the case of unsecured loans, like in the case of credit cards, the lending Organisation has no asset to sell so they can recover the loss if the borrower defaults.

6) The risk for the lender is lower in the case of secured loans thus secured loans have lower interest rates compared to unsecured loans. Although there are other factors also that determine how much interest the lender will charge, including the borrower’s employment stability, credit history, ability to repay etc. However, all of this is not checked in the case of Gold Loans.

Benefits of secured loans-

a) Low cost

Although you won't have to pledge collateral to get an unsecured loan, they come at a higher cost. Their interest rates are usually higher, their processing fees are generally high, they also most of the time charge for foreclosure. Pledging an asset gives assurance and a sense of relief to the lender that even if the default is made, they are not at any loss! As this reduces the risk considerably, the cost is lower in the case of secured loans.

b) A longer-term and larger amount 

In a secured loan, the borrower is also a profit as they have the option for a longer repayment period, huge loan amount etc.  The amount you will get against your gold depends upon your Gold's value. The higher the value, the greater the loan amount you could get against it. 

c) CIBIL score not needed

Since security has been pledged, it lowers the dependency on the CIBIL score because the amount recovery can be done by selling the security. In the case of other loans, CIBIL score is a very important factor that determines whether you'll get the loan or not.

You can compare the different loan products based on repayment methods, tenures, cost using the gold loan calculator tool provided by different websites and choose the most appropriate one for you.  It also depends upon the type of asset you hold. But before availing of any loan, whether secured or unsecured, never be in a rush and take your time to compare, calculate the pros and cons of each product offered by different banks or Non-Banking Finance Corporation and then make a conscious decision like an informed consumer.

Also Read:- HOW GOLD LOAN IS IMPORTANT  

WHAT IS A GOLD LOAN ?

A gold loan is a form of secured loan that requires little paperwork and enables banks and financial institutions to approve loans quickly without having to check the borrower's creditworthiness. After you've done that, you'll need to weigh your choices and choose the one that best suits your credibility.

The yellow metal is becoming more costly and a heavy source of investment as gold prices rise in the market. People usually purchase ornaments for future use, but if you have idle gold on hand, you can get immediate cash. People are spending more money on gold bars and biscuits these days in the hopes of making a profit later on. As a result of the rise in interest rates and sudden increase in the price of gold, financial institutions have discovered that gold can be used as a great source of investment, using it as a weapon on which even mortgages can be applied. It is, however, more valuable than a personal loan because you can be certain of obtaining a substantial loan amount. As a result, gold loans have become increasingly common in recent years, with banks and other financial institutions offering low-interest gold loans.

You can't say no to an amount that might be worth a lot of money if you have anything to offer. As a result, some thought will be given to whether or not a gold loan is a viable option for us.

Simple Procedure and Fast Disbursal :-

The advantage of a gold loan is that it has less red tape and offers more options. Even though the procedure for obtaining a gold loan is very easy, it only takes fifteen to twenty minutes to complete. This loan is an excellent option for arranging liquid cash for a borrower without putting the borrower's patience to the test. 

The Value Of The Product Never Diminish :-

Being a guaranteed loan helps both the borrower and the lender since the value of gold never depreciates. While its value fluctuates, the market price of gold still increases. Gold is a liquid product with low transaction costs, similar to lands and cash. This gives the lender a level of protection that isn't available in other types of loans. In the meantime, the lender is under no obligation to pursue the borrower for timely loan repayment. 

Larger Loan Amount :-

Eligibility for a gold loan determines the duration of the loan. Simply put, it means that you can borrow money depending on the amount and quality of gold you own. The maximum gold loan amount that banks and financial institutions can give varies depending on their gold loan policies.

Lower Interest Rates :-

Gold loan rates are lower than personal loan rates because the lender takes on less risk by lending money dependent on collateral or insurance. The annual interest rate on gold loans is usually between 12 and 15 percent. You should know the gold rates offered by the bank. For example, if you stay in Delhi the gold rate in Delhi by several will differ and you need to find out who gives the best deal to you. 

Flexibility in Repayment :-

A gold loan can be repaid in a number of different ways. You may pay in equalized amount installments (EMI) or make a single payment at the end of the term using a Gold Loan Calculator. Some NBCs and private finance institutions deduct interest before disbursing loan funds, while others do not. No requirement of guarantee: Gold is regarded as a source of protection by banks and other institutions that lend money on its behalf. There is no requirement that you have a guarantor to ensure that your payments are made. The gold assures the lender that if you do not repay the loan on time, the lender will be able to pursue you in court.

Conclusion :-

You look for the best offers for you, and you can find them. For instance, Oriental Bank Of Commerce Gold Loan charges a 7 percent (MCLR+0.25 percent) interest rate on a gold loan. To avoid getting into trouble, it's critical to evaluate your safety. Gold loans, on the other hand, are now the most common and stable form of a loan. As a consequence, we can conclude that obtaining a gold loan is always an option.

Must Read:- Why a person with bad credit score can obtain a Gold Loan 

The different kinds of the recent reforms in the policies implemented by the government have made a great impact in stabilizing the economy to some extent which was having a very bad effect on the economy. For any kind of emergency use or any medical-related requirements, especially during this time of the pandemic, the options of gold loan, personal loan and other types of loans have sold its remarkable features with the reduced and relaxed limitations and, to some extent, have made to bring some stretch of the smile on the faces of the people. Some circumstances are not used by other types of loans but the gold loan can be availed during those particular times as well. In replacement of the other types of loan gold loan is better but not vice versa.

RATE OF INTEREST:- 

The availability of the gold loan calculator will provide an excellent better estimation for a good decision. The question arises which will be more affordable to buy a two-wheeler loan through a gold loan or a two-wheeler loan. The rate of interest for a gold loan is very much lower as gold is broadly traded in the stock exchanges and the jewellery market. The abundance of gold present among the common people is another reason for the same. The amount of the gold loan spent on paying the whole amount of the car will be an excellent option for purchasing. Therefore, the interest rate will be much higher in the case of a two-wheeler loan.

TENURE OF THE LOAN:-

One of the most important things is the period of the loan for which we are availing. This factor depends that how much extra interest we are paying as extending the tenure period will extend the monthly instalment, and each Installment will involve interest on the loan. Generally, gold loans are available for a shorter period as compared with the two-wheeler loan. Canara Bank gold loan also provide such a type of tenure facility for helping the customers. Gold loans primarily event for 12 months to 36 months while on the other side of two-wheeler loan for three years to 5 years time period. For example, gold loan of rupees 1.5 lacs and interest of Rs 2500 every month then it will be a cheaper deal while on the other side of the hand the same amount of a two-wheeler loan for some time of 6 months more than that of the gold loan will attract more interest than the former one.

USE OF APPLICATION AND PROCESSING TIME:-

The gold loan application is very fast and straightforward. It does not require any kind of complex type of procedure like that of a two-wheeler loan where many former it is of starting from getting the licence to achieving the final possession of the two-wheeler. Many formal processes need to be mandatory to perform by a candidate applying for the two-wheeler. At the same time, in the gold, the amount is disbursed within 5 to 10 hours only on the same amount can be used for the same purpose but not like that of the two-wheeler loan. There is no requirement of showing any kind of income proof documents in case of a gold loan, but while on the other side, there is always a requirement of the source of income as income is the only source from where the EMI will be paid. Rate of interest for the tenure period and the documentation, fast approval, and other different opportunities linked into while comparing the gold loan for purchasing a two-wheeler or directly purchasing a two-wheeler loan for a bike.

Read More:- When Should We Apply For A Gold Loan? 

The concept of pledging any of your gold for money has been around for centuries. However, the entry of banks, as well as different lending institutions in the domain, has simply made it a more formal as well as transparent process of money lenders. Gold loans are very cheap loans, especially for very short-term credit seekers, compared to different types of loans. But, as with every type of loan, full knowledge is very important and necessary before entering into the financial agreement. 

There some important things that you should know before avail gold loan:

1) Most of the lenders simply offer loans up to 90% of your gold’s value after checking all the metal for purity as well as ascertaining the value.

2) Coins, as well as bars with a little bit higher purity, offer more value than gold jewelry.

3) The rate on this loan can be very less. In this bank, you will see repayment tenure period is 3 months to 36 months and includes rate as well as principal.

4) Any person can simply avail if they are above 18 and who has any of the gold to be pledged can opt for such types of loans.

Some of the benefits of the gold loan: 

1) This is a very secured loan. Therefore, even if you have a bad credit history, this will not impact the chances of getting the loan.

2) You have the best option to pay only the interest component as well as the principle can be paid as a lump sum amount at the end of your loan tenure period.

3) For any of you involved in agriculture, gold loans can simply be availed at a reduced rate.

4) Since this gold is the collateral, the paperwork also involved is very less. All you need or require are your basic personal id.

When the Fluctuation in gold rate does not affect this loan or pledged gold in any way or more. Once you have taken the best loan, you are not contractually bound to make up for the difference in your amount even if the gold prices decrease so much that the loan value becomes a little bit higher. Gold rate in Chennai if you are living in Chennai then you must have to see what the current price is because it will be helpful for you.

If there are any types of default in the repayment, the finance company can simply sell the deposited gold and easily recover dues as per the terms of the gold loan agreement. If this happens, you will lose your whole of the gold. As banks simply offer gold loans, you can find this difficult to finally take the gold loan from. One can use a Gold loan Calculator to estimate repayment capabilities. But before you simply make that type of a decision, do always check the loan options available to you.

Manappuram Gold Loan has exciting offers which start from Rs. 5,121 is normal that’s why new borrowers want to get gold loans. Banks have very more advantage because the rate charged by them is comparatively very less. This is so because banks are simply able to raise a few huge funds at a very less rate. Where this gold loan from the NBFC scores over a bank is always flexible this also allows you to repay your gold loan. And new borrowers want to avail gold loans from the Bank because of many types of advantages this bank gives whether it is per gram rate or interest rate.

Gold has been in existence since the dawn of time. And the usage of it has only grown more so in India than in any other country. It has become part of our day to day life increasing its value and requirement over time. The immense usage of gold then led to the invention of loan against gold and its high demand. A gold loan is a secured loan provided against the customer’s legal gold ornament or article. The loan is granted for a certain period on the agreement that the borrower pays the principal with interest on or before the end of the loan term. Gold loans are common in all classes of society primarily because of their abundance of advantages. As the production of gold articles and other forms increased, the purchase of gold became higher and higher, making it all the more for the people to use it as collateral instead of immobile properties or high-interest unsecured loans. The banks and financial institutes ensure that the gold asset received is protected and in good care. Therefore the gold is even safer in the bank’s or NBFCs vault than in-home lockers. Plus, the money sanction on the gold loan is much higher than many other loans. The interest rate is low, and the tenure is short, making it all the more attractive. Gold loan Calculators on the bank’s official website or NBFC can be used to know more about interest rates, tenure, and principal amount depending on the weight and purity of the gold asset.

The increase in demand for gold loans is significant because of its requirement of minimum documents and no income proof. To avail of a gold loan, the documents required are ID proof(PAN card, Voter id, Aadhar card, driving license, passport, or any other valid proof of id), two photocopies of the applicant and proof of agricultural land if the applicant is a farmer. Farmers are applicable for lower interest rates than usual in gold loans. Income proof is not required for a gold loan. Therefore you can take out this loan even if you are unemployed or a homemaker or facing difficulties in having a permanent job. A gold loan also doesn’t need a credit score. A credit report by the company CIBIL contains personal, banking, professional information in addition to past credits(loan or debts) of individuals, societies, companies, corporations and/or other banking customers. The report is summarized by credit score or CIBIL, which varies mainly from 300 to 900 and is extremely important for taking out most loans as it depicts the borrower’s repayment capability. But for a gold loan, it is unnecessary as it is secured. Due to the above reasons, the processing of the gold loan is easy and doesn’t take much time to get money from the lender. This makes a gold loan convenient and the first choice among other loans. Unlike other loans with only one repayment option as Equated Monthly Instalments(EMI), the gold loan also has bullet scheme payment and partial payment methods to repay interest amount and principal. The bullet scheme payment is where you as a borrower pay the total interest amount and loan amount at once at the end of tenure. In the Partial payment method, you pay a partial amount of the principal amount and interest whenever you wish before the term ends. This scheme is available only in banks and NBFCs.in the regular interest payments; you pay the interest amount each month till the end of tenure and the principal amount at the time of maturity. This is the most famously used method of payment or reimbursement. The payments can be done either via net banking or through cheque or cash. Automated detection is also available, where the lender automatically deducts the interest and principal when the time comes from the borrower’s savings account. But there must be enough funds to do so, and the borrower has to opt for this type of payment personally. Oriental Bank of commerce gold loan provides online and offline services with the best offers in the market.  

Must Read:- What is a Gold Loan? 

In the case of a gold loan, the unique thing is the low rate of interest. On the other side, all the other types of loans have a high rate of interest which acts as a matter of burden in most cases. There is a reason behind the low rate of interest also. There is the availability of the gold loan calculator, which gives better estimation when taking the decision to avail a loan. In most of the cases of the other types of loans, the rate of interest is low due to the dependents of many factors like that of competition among them Financial institutions and gold rate movements within the domestic territory of the country as well as the movement of the price of the gold in the international market.

Age Limits

First and foremost, according to the eligibility criteria for availing a gold loan, most of the banks, nbfc and The Financial institutions have separate legal formalities as per their suitability and the choices according to their business styles and patterns. On an average basis, there has been an age limit that generally ranges between the age of 18 years to 70 years. The age criteria have been made like that because at the younger age of less than 18 a person in the teenage years will be in the studies of the colleges or might be searching for any kind of job.

 Therefore, there is no stability or the independence of the financial situation at the very tender age, due to which the age has been kept with the upper limit of 18 years. If we talk about the upper limit of the age criteria, some patterns and factors have been considered. Near about 70 years of age has been kept as the upper limit. After the age of such an experience, there is no more availability of financial dependency as the age for most of the jobs gets over, and the life of the retirement starts over here. The life of financial independence also reduces or gets depleted along with the fasting days and Times.

Loan to value ratio

There has been the loan to value ratio implementation, which means how much of the money in the form of loan you will be getting as per the total value of the gold availing party. PNB gold loan offers a lower LTV ratio for the customers to benefit them. Previously the loan to value ratio went to less, but as time passed by and the different forms of loans have been implemented for the betterment of the customer. The loan to value ratio is lower than the loan amount that a customer wants to avail might not be possible if the percentage is unfavourable.

 Nowadays, the loan to value ratio has increased 75% to 90%, and even that of a hundred per cent is also available. There has been a range of between 75 - 100 % of the loan to value ratio in most banks as there is cutthroat competition among the institutions. Not a single company wants to give up their customer due to competition in the market.

Purity pattern of the gold

There has been a pattern of maintaining a purity limit so that the gold becomes acceptable for providing a loan. The purity limit starts from 18 carats and should be below the maximum limit of 24 carats. Anything above or below this limit is not treated as extractable gold for providing a loan. So one thing should be kept in mind after getting gold from other people as a helping hand during that particular time should be examined and evaluated from the goods made that should have a purity limit of between 18 to 24 carats.

Less Time Consuming

Gold loan is also preferred because of its less time-consuming documentation process. It is decided by only proof of address, proof of Identity, passport size photograph and a gold ownership document.

Read More:- A Guide to Gold Loan 

Investing in gold has been prevalent since ages and deemed to be the best option over other investments. It provides assistance to the family at the time of financial crisis, because gold loans can easily be availed by pledging the gold. India is one of the largest importers of gold in the entire world, and is also known for their love towards gold. In Indian festivals it is a ritual to purchase gold as it brings prosperity in the family, like in Dhanteras, Makar Sankranti, Gudi Padwa, Akshay Tritiya. This age-old tradition of buying gold is still considered pious by most households.  If someone faces an urgent financial disaster, this asset can generate him cash with minimum obstacles and formalities. 

When a person chooses to get a gold loan the market value of the gold pledged is calculated according to the power per gram market rate of gold on the day of loan application. The stones and gems in the jewellery are excluded from the calculation. Generally the maximum loan that a person can avail is 75% of the market value of the gold in the ornaments depending on its quality. Generally the maximum and amount eligible for an applicant of gold loan ranges from Rs 1000 to Rs 2 crores, where loan per gram is around Rs 2748 to Rs 3359. The people who are eligible to get a gold loan can be within the age of 18 to 75 years.

 Gold Loan per gram based on total weight of ornament, level of the gold purity, past one month average price of 22 carat gold and LTV ratio applied by banks, is calculated by the Gold Loan Calculator. The EMI is composed of both the principal amount of gold loan and the interest component attached to it. EMI Gold Loan Calculator helps to calculate the monthly EMI at the rate of interest and repayment time thereby minimising all the worries of paying debts. EMI depends upon the loan amount which will get higher if the loan amount rises; the higher rate of interest will increase the amount of EMI, and if the loan tenure is high the EMI gets lower.  Though the minimum age for applying for a bank gold loan is 18 years, many banks require the minimum age to be 21 or 23. 

The employment type of the applicant is also another factor to get the gold loan. Salaried employees, self employed, businessman, housewife, senior citizens all are allowed to fetch a gold loan. To meet the working capital requirement, businessmen also get a gold loan as the rates of interest are comparatively low. Homemakers and senior citizens with no income proof and credit score can easily get the benefits of a gold loan by most Banks like Axis Bank gold loan, Gold Loan in ICIC Bank, SBI Gold Loan, HDFC Gold Loan.

The ornaments that are to be pledged with the bank must be within 18 to 24 carats of pure gold. So, the price of a 22 carat gold ornament can be estimated by multiplying the price of a 22 carat gold ornament by a factor of 20/22. The CIBIL score for granting a gold loan is hardly checked but the repayment track record of the debtor may be instrumental in the CIBIL score. Even job stability or business stability is also not a factor for sanctioning a gold loan. KYC documents such as address and identity proof and the gold to be pledged is enough for availing a gold loan.

 Some most significant things from a customer's standpoint are clarity, security and choice of loan product to suit their requirements. There should be no hidden cost that may lead to extra burden on the debtor. The internal system and strategies of the company which assures no malafide activities against the gold pledged, should be transparent to the debtor. The choice of loan scheme must cover the range from high LTV to low LTV with appropriate variations in interest rates.

Also Read:- Different Sub-classes Of Gold Credits 

HOW DOES A GOLD LOAN WORK?

In a gold loan, the borrower applies for a gold loan by pledging his gold articles as collateral or security. The borrower gives these articles as a security, that, in case if the borrower will not be able to repay the loan,  the money lender or the bank, which has granted the money, has all the rights to sell that gold takes the amount of money.

A gold loan works in the following steps: -

1. You need to visit the bank with the gold articles that you want to pledge.
   
   
2. The moneylender will check the purity and the value of the gold.
   
   
3. After checking the value of the gold, the price of the gold is decided.
   
   
4. Then, after deciding the market price of the gold, the amount of loan will be decided that the bank will grant you. It can go upto a maximum of 80% of the value of the gold that is pledged.
   
   

 JEWELLERS CAN NOW REPAY PART OF GOLD LOAN IN PHYSICAL LOAN: -

The bank provides an option to the borrower to repay a part of the gold metal loan (GML) in physical gold.According to the instructions given by the Reserve Bank of India, the banks who are authorised to import the gold metal and the banks who are designated to participate in Gold Molestation Scheme 2015 can give the gold metal loan to the jewellery exporters or the domestic manufacturers of the gold jewellery. Earlier, the gold loan was allowed to be repaid in cash (Indian currency - rupees), equal to the value of the gold. But now the Reserve

 Bank of India has made some changes which are as follows: -

• The banks shall provide the option to repay a part of the gold metal loan in physical gold of one kg or more to the borrower.
  
  
• The gold metal loan should have been extended out of the local sources. The RBI said that the repayment of the gold loan has to be done using the India Good Delivery Standards (IGDS).
  
  
• The bank also added that the gold metal has to be delivered directly to the borrower.
  
  
• Another condition that was laid down by the Reserve Bank of India for the replacement of the loan was that the agreement of the loan should consist of the details of the options that can be used by the borrower. The details of the acceptable standards and the manner in which the gold has to be delivered for the repayment of the gold metal loan

ADVANTAGES OF A GOLD LOAN: -

The following are the advantages of a gold loan which are boon for the borrower to obtain Gold Loan: -

• Faster processing- A gold loan is a secured loan, and therefore, it includes minimal documentation and lenient eligibility criteria. A credit score is also not required for the approval of a gold loan. Therefore, the money lenders generally disburse the gold loan in a few hours. Axis Bank gold loan offers minimal documentation.
  
  
• Lower interest rate-  The interest rate on a gold loan is low compared to the other loans, such as a personal loan or a car loan. If you will attach another asset as security, then the interest rate can be lowered further. The interest rate can be calculated with a gold loan calculator.
  
  
• No processing fee-  Most of the banks do not charge a processing fee for the gold loan. If some of the banks or the money lenders charge a processing fee, it will be only 1-2% of the loan amount.
  
  
• No foreclosure charges- There are no foreclosure charges on a gold loan. However, if a bank or a money lender asks for some, it will be only 1-2% of the loan amount.
  
  

No income proof needed- There is no need for any income proof when you are applying for a gold loan because you are 

Must Read:- Gold Loan Repayment Methods 

Gold loans are popular in India. People in rural as well as urban areas rely on gold loans in the financial crisis. It has become one of the most trustable loans over the years. It requires easy application and can be applied from almost every bank and non-banking financing companies(NBFCs). Gold loan calculator is the online tool used for calculating the loan amount availed accurately. 

Future Capital gold loan can be availed through an online website or the nearest branch. It offers an affordable interest rate on the gold loan. It provides flexible loan tenure to the applicant. The application process is quite easy. The required documents are Aadhar Card, Valid Driving License, Valid Passport, Voter’s ID Card, Salary slip, income tax return documents, employment proof, bank statements, income proof and other documents. Future capital is recommended to get the gold loan and avail various discounts. 

The loan disbursal process of gold loan is quite fast and convenient for the applicants. The amount is sanctioned in the account of the borrower after the documents verification is completed. The amount is sanctioned between 24 to 72 hours. Once the purity check of the gold is done and the documents are verified the loan amount is sanctioned in the applicant's saving account. The fast loan disbursal of gold loans is very much beneficial for the borrower. 

Few important things to consider before applying for a gold loan is listed below:- 

1) Compare Interest Rates:- The interest rate offered by various banks and financing companies may differ. Try to choose a lender who offers minimal interest rate on the gold loan. Before filling out an application form always remember to compare different options to get the best possible deal on the gold loan. 

2) Credibility of the lender:- This is yet another important point to consider before applying for a gold loan. Always check for the credibility of the lender online for avoiding any kind of loss. Try to choose a reputed lender. Choose a lender as a private bank or public bank or non-banking financing companies(NBFCs). 

3) Choose tenure:- One more important point is to select a proper tenure for a gold loan. The shorter the loan tenure less will be the interest rate charged. Choosing a proper tenure is important to avoid any kind of loss. Many banks and non-banking financing companies(NBFCs) offer various tenure options to the borrower. One should compare the various tenure options offered by different lenders to avoid loss and get the beat deal. Moreover, one should choose the loan tenure according to the financial conditions. 

4) Repayment Method:- There are various repayment methods available at the banks and non-banking financing companies(NBFCs). One can choose the preferred repayment option as per the convenience. Remember to choose the right repayment option as per the financial convenience. 

5) Check the market price of the gold:- Before applying for a gold loan always remember to check its market price. The higher the market price the higher will be the loan amount availed. One should always apply for a gold loan keeping in mind the market price of the gold to avoid any loss and get the best possible deal. 

All over India people opt for gold loans in times of the financial crisis. It is a multi purpose loan and can be used for various purposes as per the need of the borrower. One can use the loan amount availed for educational, business, travel, house repair, buying a car, marriage and many other personal purposes. One needs to plan the entire process before applying for a gold loan to avoid any kind of a loss. One also needs to evaluate the gold purity before applying for a gold loan. All the necessary information regarding gold loan and its fast loan disbursal is given above.

Must Read:- What is the Tenure Period of a Gold Loan?