Blog #SBI GOLD LOAN

People who need some monetary assistance generally search for loan options that can cater for their needs. Among so many loans available in the Indian loan market, the borrower may find difficulty deciding the suitable borrowing option. Primarily, the debtors utilise gold loans and personal loans for emergency fund requirements. These loans provide quick disbursal of the loan amount and have manageable official documentation works to do. 

Gold loans do not require the credit score of the borrower to be strong. Still, personal loans require a good credit score of 700 or more mandatorily, as creditworthiness is an excellent factor for the personal loan to get approved. So, now people mostly get confused about which loan is a better option for them. So, an informed, comprehensive study is given below for people in a dilemma of which is the better loan option to choose.

A loan against gold is, or gold loan, where a borrower keeps gold assets with the creditor as a guarantee and gets the loan amount. The value of the gold pledged against a secured gold loan determines the loan amount provided to the borrower. The borrower needs to pay a monthly instalment until the entire loan amount is paid off, and after that, the lender returns the gold deposited with him back to the borrower. 

A personal loan is almost similar to a gold loan but is an unsecured loan where the creditor gets no collateral benefit for security purposes. If a person wants to loan an amount generated without keeping something as a guarantee, it is much harder for the loan applicant to get loan approval. But a personal loan can rescue people who are in immediate need of funds who do not have collateral to pledge.

The Gold loans tend to have a significant difference, compared amount of payout compared to the unsecured personal loan, so the interest percentage of these two loans differs from each other. Further, the gold loan per gram also differs from one gold loan scheme to another gold loan scheme. For example, where interest amounts vary from 7.5% to 29%, personal loans range from 9 % to 24%. This is because gold loans attract a low interest rate as the borrower puts collateral to reduce the risk of non-payment. At the same time, the personal loan has a higher rate of interest for its unsecured nature.

Another factor for a loan is the loan repayment period when the borrower needs to reimburse the loan. Gold loans generally have a shorter repayment period which ranges from 1 week to 3 years. Personal loans tend to have longer terms for repayment, which can range from one year to five years. The shorter loan tenure of a gold loan can be stressful but comes with a lower rate of interest. On the other hand, if a person wants to get a more extended period of repayment, then he needs to pay a higher rate of interest.

The personal loan and gold loan allow the borrower to pay back the loan with equated monthly instalments. But gold loans have flexible repayment options for their customers. Repayment options like interest-only repayment or bullet repayment system enable the borrower to pay back the sum according to their convenience. Therefore, the SBI gold loan interest rate or Punjab National Bank can be lower than other private banks and the same in the case of the personal l too.

The applicant's of a gold loan or personal loan want their lender to process their loan in the shortest amount of time. But the secured gold loan helps the borrower to procure the loan amount faster than a personal loan. Additionally,  in gold loans, people have to pay the processing fees with additional charges for gold valuation, administrative cost, documentation fees and many other things. Whereas in a personal loan, the charges are limited to service fees, insurance and processing fees.

Must Read:- Objectives Of Personal Loan 

The monetary sum that is provisioned because the credit office is browsable to the financial organization on clear repayment terms whereby the comfort of the beneficiary is offered to and subsequently the advance sum is inferable by the repayment capacity and ability of the beneficiary whereby it's checked whether that the borrowers can care of the accurate measurement of the credit. 

Following are some of the crucial estimates that are embraced by the financial specialists to support the development possibilities of the economy and subsequently ensure that the development openings in the economy-:

1) Quite possibly the main benefits that are given through the provisioning of gold loan offices by the non-public financial business foundations are the development and making of provisioning of capital offices. The gold loan gives a monetary add up to the borrowers that they will adequately use as capital for purchasing indispensable hardware and instrumentality that might be used in transforming crude materials into completed items and administrations consequently promising development possibilities in the economy. For instance, a rancher utilizes the gold credit sum moved to his capital record to get farming hardware like water system instrumentality and work vehicles that may encourage in developing and developing the land.

2) The Economic boundaries in India are by and large accelerating the economy as a full dependence on target factors projected by the monetary exercises performed by the rural area populace of the nation of the work cooperation power of the nation is utilized in the horticultural area. So going to the needs of the ranchers and along these lines the cultivators are vital, one thing that is certainly perceived by the non-public financial cash experts in the nation thus they give sufficient credit influence and advance offices to the borrowers in the sort of gold advances.

3) After the gainful land has been developed, the harvests are isolated and brought to the processing plants which may be completing the change technique for crude materials to the completed item. At that point, the item would be sent to the discount and retail market and would later be sold in the market to procure benefits for the cultivators of the harvest. So, it's understandable from the conversation that the total chain of changing rural assembling to completed the process of cultivating item is required through the implantation of capital in the technique because the capital infuses the much-required liquidity in the organizing strategy for the gold credits and extra union of a developing assumption in the economy.

4) At times the borrowers are underneath the pause in assuming extreme acknowledgment to make up the obligation allure after they don't appear to have the option to support from now into the foreseeable future a segment of their monetary benefit towards obligation union. It also happens that they notice a larger part segment of their yearly monetary benefit to be useful by the credit specialists as normal interest installment and portion derivation. 

5) For instance, A beneficiary features a current obligation measure of creature item. He could apply for a gold advance of creature items from the private business improvement credit SBI gold loan per gram rate foundations and upon the exchange of the advance sum, the person can take advantage to take care of the current obligation and utilize the abundance sum for capital buy. In this manner, gold advances give financially suitable imminent development in the public economy of a country. On the off chance that you have any questions in regards to the gold advance, drop down your inquiry in the remark area and our chiefs will hit you up with the arrangement inside the greatest period.  

Also Read:- Fastest way to avail gold loan 

A Gold loan is one of the easiest loans to apply as compared to the other loans. The eligibility criteria of a gold loan is simple as compared to the other unsecured loans. Anyone can apply for a gold loan subject to certain conditions.

What are the necessary things required to obtain a Gold Loan?

The eligibility criteria of a gold loan or any other loan describes all the necessary things that are required to apply for a gold loan. Also, the eligibility criteria of a gold loan is really simple as compared to the other loans. The best part about a gold loan is that anyone can apply for a gold loan, any person who has some gold jewellery or gold coins is eligible to take a gold loan. Most of the people know a bit about the credit of a gold loan, its eligibility criteria, documents required, etc. The eligibility criteria of a gold loan is really simple so that any person who possesses some gold coins or some gold jewellery can apply for a gold loan and is eligible for a gold loan. As a borrower, you do not need to give any income proof documents like the salary slips or the bank statements. Also, eligibility criteria for a gold loan varies from bank to bank.  The EMI can be calculated with the help of a Gold loan EMI calculator. Following are some of the basic guidelines of a person who can apply for a gold loan from any bank or any other financial institution.

1. Age of the applicant:
   Any citizen of India who is above the age of 18 years and below the age of 70 years can apply for a gold loan. He is eligible for a gold jewellery mortgage. However, most of the banks also demand a co-borrower if the age of the applicant is above 70 years.
   
   
2. Profession of the applicant:
   Most of the banks and the financial institutions in India offer gold loans or jewellery mortgages to the salaried employees, self-employed professionals and the businessmen. It also includes the farmers and traders.
   
   
3. Accepted quality of the gold:
   For the eligibility of the gold loan or the jewellery loan, a borrower can deposit the gold in any form like jewellery, some coins or as ornaments.

• Purity of the gold- The minimum purity of the gold that is deposited must be between 18 karats to a maximum of 22 karats or 24 karats. The minted gold coins are only accepted if they are 24 karats and a maximum weight of 50 grams. The approved amount of finance is determined mainly by the weight and the current market value of the gold that is deposited.

Documents That are required for a Gold loan:-

The following are the documents that are required for a Gold loan are:

• Identity proof:- Pan card, Aadhar card, Passport, Voter ID.
  
  
• Address proof:- Driving license, electricity bill, passport, rent agreement, gas bill, etc.
  
  
• Additional items:- two passport size photograph.

Some of the banks also ask for the income proof documents:-

• Salary slips ( of the last three months)
  
  
• Bank statements ( of the last three months)
  
  
• Form 16 of the last financial year

What is a Gold loan?

A Gold loan is a loan that is offered by the banks or the non-banking financial institutions to the customers who are in need of a loan. By availing a gold loan, a person can make use of the gold that has been lying in his locker for ages. Now, you can not only look good by wearing gold but can also make smart use of it with the help of a gold loan. You do not have to sell your gold to get some money. Here, in a gold loan, you just need to provide that gold to the bank or to the money lender as a security or collateral and after the successful repayment of the loan, you will get your gold back in no time.

 Why should you apply for a Gold loan?

• It is really easy to apply for a gold loan. A person can also apply online for a gold loan.
  
  
• The eligibility criteria is really simple in a gold loan.
  
  
• There is minimal documentation in a gold loan. SBI Gold loan provides minimal documentation.
  
  
• Your gold will be in safe hands.
  
  
• You can also get a discount if you provide extra collateral.

Also Read:- Features that celebrates Gold Loan borrowers 

Home is where comfort lies! Everyone agrees with this, and comfort does not necessarily mean comfortable sitting and chairs; it refers to the relaxed mindset you have when you enter your home, and that only comes when you are at peace within your mind and heart. Now, that peace can be attained by anyone, not necessarily by people with luxuries at their place but by anyone with a clean house and everything correctly set up. There should be no leakages, ceilings, wire problems at your place as that can be both disturbing and risky.

So, to have a proper home, one should take care of such casualties and deal with them from time to time. Home improvement steps can do this. Home improvement is as vital as keeping our bodies fit is, but then home improvement is a giant expense that can dig big holes in our pockets and bank accounts; people avoid spending on this necessary expense due to the reason that it involves huge costs and most of the people cannot afford such giant expenses and ignore this till this expense can be delayed. Still, one should not ignore it as prevention is better than cure. So here is an easy solution for your budget problem, you can avail a gold loan for your home improvement.

The gold loan can be very beneficial for your home improvement expenses as a gold loan can come in handy whenever you require it; it does not require many formalities, and you can get a gold loan within a few minutes. The gold loan comes with a lot of benefits; let us discuss some of these benefits as below:

• Gold loans have a flexible tenure which can range between 3 months to 3 years; that is, you can always choose a tenure of your own choice which gives you an upper hand, it is a secured loan that does not make you borrow money from anyone as you can choose a flexible tenure period as per your convenience.
• Gold loans come with a variety of rate of interest that is very flexible, the rates of interest can range from 6%-17%, so one can choose the most convenient rate of interest after considering the condition of their pocket, and if you tend to have good relations with the bank or lender you can get an added advantage of that too, you might even come across some attractive schemes which might give you more added advantages, but these rate of interest depend on several factors such as the tenure, the amount of you loan etc.
• Gold loans have no processing charges in most cases; either some of the banks charge a fixed percentage on the whole amount of the gold loan, or others may charge a fixed percentage such as 1%-2% of the processing charges.
• Gold loans don’t have any rigid criteria for eligibility for the age factor; it can be a minimum of 18 years and a maximum of 65 years and can vary a little up and down depending on different banks and money lenders.
• Gold loans don’t make you crazy with documentation requirements; they are straightforward; However, in the process of document verification, they only ask for a few essential documents that can be easily arranged.

Many banks offer gold loans, and with gold loans, there is an added advantage that you do not have to use the loan amount for a specific purpose; there are many benefits of the gold loan if taken with the proper steps from the right organization.

SBI gold loan is provided by the SBI Bank that is trusted with its services of providing gold loans as they offer gold loans on easy terms and conditions. They offer flexible tenure and a manageable rate of interest on gold loans. They require minimal documents for approval of the loan such as identity proof, residency proof, income proof and some additional documents such as passport size photographs etc. one should carry these documents after verification and carry both the originals as well as the photocopied documents so that there is no delay in the evaluation of the documents.

Read More:- Ways To Repay Gold Loan 
 

Even when you have medical insurance coverage, you ought to deliver a large amount of cash while checking in to a health centre for remedy. The insurer's popularity of cashless remedy might also additionally take time. Meanwhile, the health centre should ask you to pay a few quantities prematurely to start remedy. You may also want cash if your coverage has a small sum insured or if for a few cause you're pressured to visit a non-community health centre.

 If You Want To Elevate Cash In A Hurry. Here Are Some Sources You May Wanna Look :- 

1. Personal Loans:- A perosnal loan can be sough after by any bank. They are usualy unsecured loans and provide low intrest rates. Even a gold loan canbe taken in which gold acts as a collateral. Banks like SBI Gold Loan offers intrest rates as low as 7% per annum.
   
   
2. Credit Unions: These not-for-profit establishments provide a number of the maximum consumer-pleasant loans. A credit score union loan regularly comes with a decrease APR and greater bendy phrases than one from a financial institution or online lender. Fair- and bad-credit score borrowers (629 or decrease FICO) might also have a higher danger of having approval from a credit score union because the underwriting approaches generally tend to contain greater than credit score information. Some credit score unions also provide payday opportunity loans, which can be more secure than high-interest, short-term payday loans. These loans have the most APR of 28%.
   
   
3. Salary Finance: Salary Finance presents loans via employers and companions with Equifax to provide agencies perception into employees' economic health. The partnership became withinside the works earlier than the COVID-19 disaster began, says Salary Finance CEO Dan Macklin, and its providing isn't always contingent on the pandemic's impact on the economy.
   
   
4. Credit Card:-  They are also on the list. However, most borrowers would have paid EMIs for the month of March as these are automatically debited from their bank account. Applies to all term loans and working capital loans with all types of lenders: commercial banks, including regional rural banks, small finance and local banks, credit unions, microfinance institutions and non-bank finance companies (NBFC).
   
   
5. Online Creditors: Online creditors may be a quick alternative for emergency loans. You'll probably want an appropriate credit score and consistent earnings to qualify in today's climate. If you're now no longer optimistic whether or not you will qualify or what price you'd get, you may pre-qualify for a web mortgage with NerdWallet. Pre-qualifying does now no longer affect your credit score score.
   
   
6. Relief On Repayment:-The RBI has announced several measures to facilitate liquidity and relieve lenders and their borrowers. For example, it announced a three-month moratorium on instalment payments on all fixed-term loans such as home loans, auto loans, education loans, and permanent consumer loans. And personal loans due between March 1 and May 31, 2020.
   
   

It's not an exception, just a change in payment schedules; however, the outstanding portion of the fixed-term loans continues to bear Gold Loan Interest Rate during the moratorium period. Therefore, NBFCs, including HFCs, are required to make changes and align payment schedules, accounting changes, and provisioning schedules and seek approval from the board before implementing the three-month moratorium. The central bank has stressed that lenders will develop board-approved guidelines to provide relief to all eligible borrowers. However, analysts say borrowers may need to contact their lenders to get out of the moratorium and prove their income has suffered.

 If a borrower fails to apply for the moratorium, the bank can continue EMI self-debit. You have to pay additional interest for the three-month moratorium, which is calculated based on simple interest. This is because interest accrues during the moratorium period, and borrowers must pay the accrued interest along with their monthly payments starting in June. The central bank has made it clear that the rescheduling of payments, including interest, does not qualify as late payment to provide credit institutions with information to credit bureaus. The delay does not adversely affect the creditworthiness of individual borrowers. In addition, the three-month moratorium does not apply to demand credits, such as gold loans.

What are the Merits of Gold Loan?

After learning about the process for applying for a gold loan, you'll want to learn about the benefits of taking out a gold loan and why so many people prefer this secured loan option.

1) Lower Interest Rates

Everyone needs their loan facility to have lower interest rates. Since it is a secured loan, a Gold Loan could be the better option for you. Your gold will be used as leverage to secure the loan. The interest rates on Gold Loans vary from 9% to 20% per year, but on average, they are between 10% and 16 percent per year.

2) Higher Loan Amount

A gold loan allows you to borrow the maximum amount possible against your pledged gold jewelry. The Loan-to-Value Ratio is used by lenders to calculate the loan amount (LTV). In the case of a gold loan, this ratio will range from 65 percent to 90 percent. This ratio indicates that you can borrow up to 90% of the total gold value and as little as 65% of the total gold value.

3) Flexibility in Repayment

• EMI Method –The Tenure will be paid in monthly installments, with a portion of the principal and interest paid each month.
  
  
• Interest is Paid Regularly – Pay the interest at regular intervals – weekly, quarterly, semi-annually, or annually , and the principal at the end of the term.
  
  
• Interest Payments in Advance – Pay the entire interest rate upfront and the principal sum at the end of the term.
  
  
• Bullet Redemption – Make no installments for the lifetime of the loan. Rather, pay both the principal and interest at the end of the year.
  
  

4) Faster Processing

If you need money as soon as possible, a gold loan could be the best option for you because you will get the loan sum much quicker than with other types of loans. As we stated in the procedure section, the loan sum is disbursed into your account as soon as the paperwork and authentication are completed. Furthermore, since you are using your gold reserves as collateral, lenders are fast to disburse the loan.

5) No Need for Credit History

If you've had several loan applications denied due to a bad repayment history, a gold loan might be a good choice for you because lenders don't look at your credit history before granting you the loan. This is due to the protection you have offered in the form of gold ornaments or bank-minted coins. A gold loan is ideal for those who are looking for a loan with lenient eligibility requirements. But better be aware of gold rates where you live. Suppose you are in Chennai, then it better to know about the Gold Rate Today at present as it will help you to evaluate your gold value.

6) Demerits of Gold Loan?

You can Lose your Gold Assets, As you might be aware, you obtain a loan against your gold assets in the form of jewelry and coins, and you receive your ornaments back from the lender after the loan has been completely repaid. However, you should keep in mind that if you do not repay the loan or default, you risk losing your properties because the lender will settle the loan by selling your ornaments. 

7) Impact on CIBIL Score 

Your credit history is not checked when the loan sum is issued, but if you miss a payment, your CIBIL score will be negatively affected. As a result, it's a good idea to pay back the loan in full as soon as possible, using whatever form you selected at the time of application. On top of that, on-time payments will help you increase your credit score.

CONCLUSION-

The gold loan is always seen as a better option if you had a bad credit history. Some many banks and NBFCs offer gold loans as they are aware of the opportunity that gold can bring to you and also to them. Banks like SBI offer gold loans at a cheaper rate. The gold loan offered in SBI Bank is better in comparison with other banks. So it is better to go with market search to get the best deals for yourself.  

Must Read:- Gold Loan in times of Covid 

FEATURES OF A GOLD LOAN: -  

The features of a gold loan can be summed up in the 

following points: -

• PURPOSE- You can avail a gold loan to fulfill your financial needs like for medical emergencies, educational purposes, for a vacation, for a wedding, etc.
  
  
• SECURITY- The gold that has been pledged by you with the financial institution or the bank or the money lender acts as a collateral or security against which the amount of loan is provided.
  
  
• TENURE OPTIONS- The tenure for the repayment of a loan can range between 3 months to 36 months.
  
  
• FEES- The charges and the other fees that are applicable on a gold loan are - late payment charges, processing fee, valuation fees, non-payment of interest, etc.
  
  
• REPAYMENT OPTIONS- There are different repayment options available that are offered by the money lenders to the borrowers.
  
  These are as follows: -

1. Repayment of loan in Equated Monthly Installments (EMI).
   
   
2. Payment of interest upfront and then, the repayment of the amount of loan at the end of the tenure of repayment.
   
   
3. Payment of interest every month and then, the repayment of the amount of loan at the end of the tenure of repayment.
   
   

• REBATES- Most of the lenders offer discounts on the existing interest rates on the gold loan, if the borrower repays the existing EMIs on time. This rebate can go upto 2% on the original interest rate.
  
  
• SAFETY- The gold that you will deposit to the bank or to the money lender as a collateral or security to the bank is absolutely safe. You do not need to worry about the gold that you have deposited. Your gold will be kept in a safe place. And after the successful repayment of the loan, the gold that was deposited by you as a security will be given back to you.

DOCUMENTATION: - The documents that a borrower needs to have while applying for a gold loan are as under: -

• Two passport size photographs.
  
  
• ID Proof- Driving License, PAN card, Passport copy, Aadhaar Card, Ration card, Form 60, etc.
  
  
• Address Proof- Driving License, Voter ID, electricity bill, Ration Card, Passport copy, registered lease agreement not older than three months.

BENEFITS OF A GOLD LOAN: - 

• MINIMAL DOCUMENTATION-  Most of the banks offer a simple documentation process as it is easy both for the borrower and for the lender too. The borrower needs to submit only the necessary documents and there is no need for any income proof. SBI gold loan ensures minimal documentation.
  
  
• WAIVER ON FORECLOSURE CHARGES-  Most of the banks does not levy any foreclosure charges on the loan after a minimum time period. So if a borrower wants to foreclose a loan, he can pay off the entire amount without paying the foreclosure charges.
  
  
• LOW INTEREST RATES- The interest rates on a gold loan are lower as compared to the other loans. This is because the borrower provides a security to the bank so, the rate of interest is low in a secured loan.
  
  
• FLEXIBLE REPAYMENT TENURE- The minimum tenure for the repayment of a gold loan is six months and the maximum tenure for the repayment of a gold loan is 24 months. However, a borrower can choose the tenure according to his needs. You can also get a high maximum LTV (Loan to Value) ratio of 75% of the weight of the gold that was calculated.

CONCLUSION: - When a person is in need of instant funds, the most safest option is to avail a gold loan. He can make use of the gold that has been lying in his cupboard for ages with no use. He can use it to cope up with the situation and after attaining the loan, he has to repay the amount back with interest. After the successful completion, he can get his gold back too.  The gold loan interest rate is also really low as compared to the interest rates on the other loans. Therefore, it is an affordable option to apply for a gold loan. The main important thing in this loan is the purity of the gold.

You are guaranteed full client pleasure when it comes to receiving a gold loan from SBI. offers full simplicity together with an excellent experience, thanks to timely disbursements and reasonable interest rates. Many individuals are searching for gold lending providers since we have the country's largest gold loan portfolio.

How may the lower rates of gold loans be achieved?

Offering special :

Check current deals and interest rates given by different banks on a regular basis.

Loan type received:

You might also be obliged to pay a high-interest rate if you want to use an overdraft facility against gold.

Value ratio credit:

In addition, the bigger the value loan, the greater the charged interest rate. In accordance with the current RBI circular, banks can lend up to 90% of gold as loans to gold borrower loans.

Holder of the bank's existing account:

Gold loans are sometimes supplied to the current bank clients at a reasonable interest rate. If an existing savings account, FD, or loan account is available.

For different loans, compare bank offers:

Banks often give a lower rate of interest for higher loans, and vice versa. In addition, NBFC's interest rate is usually higher because they provide a flexible and speedy service to small loan amounts.

Interest rate types for gold loans:

The interest rates for gold loans vary from loan to loan. The computation of the gold loan, however, often relies on two rate categories, as listed:

Purpose of Lending:

Financial loans Gold loan interest rate is also depending on lending purposes. Banks normally give reduced interest rates on agricultural gold loans issued to farmers and farmers to pay their farm costs.

Interest fixed rate:

The interest rate imposed on the amount of the loan remains stable for the whole loan period. Therefore, the EMI Gold loan remains the same for the whole payback term.

Interest floating rate:

The borrowing rate for Gold is not set and fluctuating. In this instance, the interest rate is tied to external benchmarks that the creditor receives, like the RLLR or the Prime Lending Rate (PLR). Thus, with market conditions, interest rates continue to change. Also, the EMI on the Gold Loan may increase or decline abruptly because the rate has not been fixed.

Gold loans for agriculture:

These are loans to farmers and farmers against gold ornamental products to give them financing for crop production expenditures and to invest in agriculture or related farming. Such loans are key characteristics:

• Proof of agriculture is necessary for the form of evidence of land records.
• The borrower must provide a written undertaking for which the loan is intended to be used. Banks can also monitor how such loans are finalized.
• Loans granted for agriculture are classified as priority sector loans and are eligible for government interest subsidy schemes, which decrease borrower's interest costs.
• In general, these loans are permitted for up to 3 years.
• Some banks offer overdraft facilities with regard to these loans.
• The interest rate for agricultural gold loans is between 8.00% and 10.00%.

Gold Loans from Non-Farmers:

Loans covering all the other borrower’s groups except farmers and farmers are referred to as non-farming gold loans. These loans are open to all people including employed, self-employed professionals, entrepreneurs, women, women, homemakers, students, pensioners who own the same gold and wish to make the same promise to obtain a loan. The characteristics of non-agricultural gold loans were described by repayment possibilities under the lending programs.

Charges for Gold Loan:

Processing costs for gold loans :

Most banks charge up to 1 percent loan amount to minimal processing charges. There may possibly be lesser costs available from some banks. To receive the lowest cost, you may compare your gold credit interest rates, deals, and cashback using SBI gold loan.

Prepaid and forfeiture Gold Loan :

It is called half prepaid if you desire to reimburse your debt slightly before time. If you opt to pay the whole amount of your debt in advance, it is termed foreclosure. In these cases, banks often demand advance payments or foreclosure costs, which may vary from 0 to 1%. Check carefully, therefore, whether your low-interest gold loan includes substantial prepayment or foreclosure costs. There are also lock-in times that can be reimbursed before some gold rate loans are made.

Also read this: Gold Loan In Covid-19 Situation 

A gold loan is a loan in which the borrower takes a loan from the bank and gives their gold as the collateral. In a gold loan, the borrower is not required to submit any other collateral to the bank other than the pledged gold ornaments. After the borrower gives his gold ornaments as collateral, he is provided with a gold loan. Gold loans are provided by various banks these days. Gold loans are considered to be safe and quick loan. Many people are opting for gold loans.

Gold loan is not a new concept in the Indian market. The gold loan started from the southern part of the country. In today's time, gold loans have occupied a special place in the Indian market. Today, we see many advertisements from many gold financing companies informing the public to keep their old ornaments in safe custody and provide a loan in return. India is a country with maximum gold users, so people prefer gold loans. Gold loans were considered as short term borrowings and were no interest leveraging activity back at that time. Back then, Muthoot finance and Manappuram finance were the two most important gold loan companies established in 1939 and 1949. A Gold loan calculator can help you in calculating your loan EMI.

Gold loans have occupied a special place in India. It is considered an important asset and immediate source of cash, especially for the rural households in India. Gold loans have become very popular in the cities as well as the rural areas. The gold loan still has the growth potential with increasing small business. The gold loan originated from the southern part of the country states like Tamil Nadu and Kerala. The money lenders from all over the country started collecting gold in return for money. All over the country, the landlords, shroffs and Marwaris from other parts of India have traditionally lent villagers money against their gold for special occasions like marriage after sometimes few banks in India established the whole process of gold loaning with proper norms. After establishing proper norms, the banks make gold loaning easy. Gold loan companies started accepting deposits from the public, also many local societies that had a few individuals who controlled the whole process like how and to whom the loans should be given. SBI gold loan provides a very low interest rate.

Gold prices are touching heights in India every day. Many gold consumers who hold gold in reserve always consider taking gold loans to meet their credit requirements, and Indian financial entities have a host of options on offer.

Pros of taking gold loans:

• Existing gold ornaments can be used for assets.
• The customers can use the same piece of jewellery or gold coins or bars to get loans. This helps the borrower to get loans multiple times with the same gold jewelleries.
• The flexibility to repay the loan principal. This encourages the small businessmen and trader to take the loan who faces any kind of loan crunches.
• Faster processing- gold loans do not even require a credit score for loan approvals. For availing of a gold loan, the process is short and easy. It has lenient eligibility criteria and minimal documentation.
• Many banks provide gold loans at zero processing fees.
• Income proof is not needed. It makes it easier for the customers. 
• Gold does not depend on the credit score. So, a credit score is not required.

Conclusion

Gold loans have become popular by the time. Many people in India prefer gold loans. People living in cities and rural areas prefer to take a gold loan instead of any other loan because getting a gold loan is much easier. A gold loan is a secured loan. It also comes with a lower interest rate. Earlier, there were no proper norms of gold loans, but banks provide gold loans with appropriate norms and established rules to get loans quickly with time now. People nowadays get gold loans in less time with very little documentation. Over time gold loans are getting popular. In coming times also the customers of gold loans will increase.

Also read this: Gold Loan For Medical Emergencies 

A gold loan is a type of loan that provides protection to both the lender and the borrower. The price of gold is currently at an all-time high, but buying gold now will help you prosper in the future because the yellow metal never goes down in value. 

Bullet Repayment, Liquid Gold Loan, and Gold Loan The three types of gold loans provided by the lender are gold loans, gold loans, and gold loans. Repayment periods for the Gold Loan and Liquid Gold Loan are up to 36 months, while the Bullet Gold Loan is up to 18 months. For better investment returns tomorrow, you should be aware of the current gold rates in the market.

Take out a gold loan from an Indian bank, with annual interest rates ranging between 7.5 percent and 29 percent. You can get a loan for up to Rs.1.5 crore with a repayment period ranging from 3 months to 3 years, depending on the loan scheme you want. You will donate the gold ornaments and jewels in the event of a financial emergency. Gold loans are secured loans that enable you to retain your actual gold in the form of jewellery or coins as collateral for the funds you require. It is regarded as a viable alternative for short-term cash needs.

Features of Gold Loan

You can get a gold loan for a variety of reasons, including school, wedding plans, medical expenses, and so on.

Protection: The gold pledged to the bank or financial institution acts as insurance or collateral for the loan amount. Options for tenure can range from three to 36 months.

Repayment Options: According to lenders, borrowers have three main options for repaying a gold loan. One of them is repayment in Equated Monthly Installments. Interest is paid in advance, and the principal loan balance is repaid at the end of the term. The principal loan balance is repaid at the end of the loan term, and interest is charged every month.

Rebates: If the borrower repays the interest on a gold loan on time, some lenders can offer a discount on the current interest rate. This refund would be in the range of 1% to 2% of the original interest rate.

Things required to consider while taking a gold loan:-

What do you think about when getting a gold loan? Here are some main factors to consider when deciding whether or not to take out a gold loan.

• Loan Amount: The value of the gold you pledge will dictate the loan amount when you apply for a gold loan. SBI gold loan lending can have a minimum and maximum loan amount. If you need a particular loan amount, make sure you have the necessary gold and that it meets the lender's requirements.
• Rate of Interest: A gold loan has a lower interest rate than an unsecured loan since the borrower must have collateral. However, since interest rates charged by different lenders will differ, it is in your best interest to compare interest rates.
• Applicable charges: In addition to the interest rate, lenders can charge a processing fee, paperwork fee, appraiser fee, payment default fee, loan overdue fee, and other fees. When these payments are applied together, the total cost of the loan increases. As a result, think about the fees the lender would charge you before applying for a gold loan.
• Tenure of the Loan: The time it takes to repay a gold loan will range from three to 36 months. As a result, you should make sure you know your repayment capacity and choose a gold loan with a fair term.

There are some stages in the gold loan process that must be known ahead of time. Even though it is a simple procedure, putting your valuable ornament at risk can cause problems if a loan is not required. It's important to remember that if you don't pay back your gold loan on time, you'll lose control of it.

Must Read:- A gold credit utilized for Dire Needs  

Banking sector in the Indian financial system plays the most important role in shaping the economy. Banks in India offer various kinds of services, out of which the service of providing/granting loans is the utmost important. Banks provide various kinds of loans, namely education loan, car loan, home loan, gold loan, personal loan, and many more. Though there are different kinds of loans, the nature of a loan can either be secured or unsecured.

Secured and unsecured loans are the terms coined from the perspective of banks. Loans like education loans are unsecured loans, as the bank trusts the customer and grants an opportunity, whereas a gold loan is a secured loan, wherein the borrower pledges gold (either in the form of jewelry or biscuits or bricks) and asks for the loan. What a secured loan basically suggests is that the asset/property/gold which is pledged by the borrower would be kept with full security, and the borrower would be able to get his property back after paying the principal amount along with interest.

A gold loan grant asks the borrower to pledge any kind of gold (more pure than 18 Karats), to get the loan granted. It is similar to a home loan, wherein the bank asks the borrower to submit the official papers of any other property as collateral.

Secured loans are comparatively easy to get and hence are more in demand. Such loans guarantee money, time, and schemes to repay the loan on time. Banks also keep the pledged properties in high security vaults, so the borrower also gets a sense of satisfaction that his belongings are kept somewhere safe. Though to get the ownership of pledged assets back, the entire amount (principal amount + interest) must be paid. It is also true that interest rates on gold loans fluctuate a lot because of market volatility. Hence, availing gold loans in recession or when the market value of gold is low should not be considered as a good financing option. As higher interest rate equals higher payment within the same time.

Coming to defaulting in gold loan, banks increase the interest rate and charge late fees, credit/CIBIL score is negatively affected, the bank would blacklist your name from providing loans any further, and you would not be able to fund future operations via organized loans. The risk in availing a gold loan is that of losing the ownership of the gold endowed to the bank. Banks generally put the gold pledged by the borrower on auction so as to recover the amount they didn’t receive back.

Hence, every borrower must foremost go through the terms and conditions, must logically structure the loan repayment process, must check the gold loan interest rate along with the market price of gold, and then accordingly decide whether it is the right time/bank/policy to avail the loan. The gold loan interest rate can be checked using the gold loan EMI calculator from any credible website on the internet, and based on that the decision should be made.

These were a few security measures which secured loans adhere to. Secured loans also abstractly push the borrower to judiciously utilize the amount availed because of the fact that his property is in the hands of an external body; which means that secured loans also motivate the borrower to work with more precision and be concise with the monthly payment budget.

Gold loan is the most convenient option to get money for the short term, mainly because of lower interest rates (generally lower when compared to other kinds of loans). SBI Bank is one such bank which offers friendly interest rates and requires basic approval documents to grant the SBI gold loan.

Also Read:- Why Should We Choose A Gold Loan?