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Gold Loan
A gold loan is a type of secured loan given in exchange for gold jewelry or coins to provide instant financial assistance. It is a great option for people with insufficient collateral to get a bank loan.
The borrower, who is typically willing to exchange cash for gold, receives the loan in exchange for providing some sort of collateral and agrees to repay it with interest over a specific period. The biggest disadvantage of taking a gold loan is that you stand to lose your collateral in case of default. However, to mitigate this risk, some lenders offer insurance packages for your gold items that protect them in case of accident or theft.
To avail of a gold loan, the process is similar to a mortgage loan. The borrower applying for the loan has to contact a lender who deals with this type of loan and fill out an application form after discussing the deals and terms with the dealer or the banker. However unlike with a mortgage loan, the lender is not interested in your income or other aspects of your credit, the lender will assess the eligibility criteria in terms of the value of gold deposited, purity, etc. Once the eligibility criterion is met, the borrower must deposit collateral before receiving their loan amount and repay the loan within the decided due date.
Unique Points & Features
Fast approval & capital assistance
Loanz360 helps you to avoid the hassle of going through the credit approval process and delays in the disbursement of funds. We provide you instant assistance with rapid disbursals, typically approved within a couple of hours.
Flexible terms and conditions
On average, gold loans are short-to-medium term loans with repayment tenures lasting from as low as 6 months up to 36 months. These collateral-based loans are free of constraints as financial partners are considerate to negotiating terms.
High LTV value
Avail of loans up to 80% of the gold value with financial partners at Loanz360 at competitive rates and flexible terms.
Lower interest rates
Most banks offered interest rates on gold loans as low as 7% with better terms. Loanz360 financial partners are willing to work even with individuals having low credit scores at competitive interest rates.
No paperworkÂ
Gold loans are 100% paperless. Basic documentation (Typically, ID and Address Proof) documents required to evaluate the authenticity of the borrower can be submitted online in just a few easy steps. Therefore, without ITR or income assessment, the process is hassle-free and relatively quicker than other loan types.
Doorstep(In-house) evaluation
An appointed bank representative (licensed professional) will perform an on-the-spot evaluation of the gold at your doorstep. The process is faster and the amount is transferred to your bank account within a few minutes after the completion of the process.
Zero prepayment charges
There are no charges for premature repayment or prepayment penalties as long as the loan is fully repaid within the stipulated period
Safe storage policy
Our financial partners follow safe storage protocols with appropriate infrastructure and measures to secure your gold as stipulated by the Reserve Bank Of India (RBI).
Low or no fee
Most lenders do not charge processing or disbursement fees on gold loans. Avail of exciting offers from Loanz360 by discussing your requirements without financial experts.Â
Special loan schemes for women
Contact Loanz360 to know more about the available scheme options.Â
Types
Type by Repayment
OD: Instead of a term loan, individuals may avail of a loan with a fixed OD limit that they may repay on the funds utilized than the funds obtained.
Term Loan: Term loans are regular loans with a fixed amount transferred to the bank by the lenders on the gold submitted. The evaluation of the gold is done based on different factors and a loan amount is decided by both parties that must be repaid within the agreed timeline.
Bullet Payment: Borrowers can postpone their repayment with principal and interest until the end of the tenure and pay the outstanding loan in a lump at the end of the contractual term (loan maturity).
Apart from several repayment modes available on gold loans, there are various types of gold loan schemes in India.Â
Note: These schemes are offered by different banks and financial institutions. The schemes vary in terms of the amount to be borrowed, the tenure for which the loan can be taken, the interest rates on offer, and other terms and conditions.
Eligibility Criteria
Age: 18 years and above
Collateral: Gold (18 carats or above)
Gold Type: Ornaments/Articles/Bars/CoinsÂ
Credit/CIBIL Score: Any profile
Note: The eligibility criteria mentioned above are generic and may vary from lender to lender. Please reach out to us at Loanz360 for a personalized eligibility chart.
Documentation
ID & Address Proof: Passport/Voter ID/Aadhar/Driving License/PAN Card/Form 60/Rent(or)Utility Bills(Accepted As Address Proof)
Additional Requirements: Duly filled application form/Passport sized photographs/Signature proof
Note: Documents requested may vary from lender to lender, contact Loanz360 for any inquiry.
Charges & Interest Rate
CURRENT GOLD LOAN INTEREST RATES START @ 6.40% P.A ONWARDS. Compare interest rates and check more deals offered on gold loans by our financial partners at Loanz360 in 2022.
Bank Name | Interest Rate (P.A) |
HDFC | 9.50% onwards |
Canara Bank | 7.35% |
ICICI | 10.00% |
Bank of Maharashtra | 7.10% |
SBI | 7.70% |
Manappuram Gold Loan | 12.00% |
PNB Gold | 7.70% |
IndusInd Bank | 8.75% |
Muthoot Finance | 9.95% |
Shriram City | 11.50% |
Aditya Birla Finance | 11.75% |
IIFL | 12.00% |
Axis Bank | 10.49% |
Kotak Mahindra | 8.00% |
Federal Bank | 7.99% |
Central Bank Of India | 7.10% |
UCO Bank | 7.25% |
Yes Bank | 9.65% |
Corporation Bank | 7.25% |
Tamilnad Mercantile Bank | 7.30% |
Andhra Bank | 7.75% |
IDFC Swarna Shakti | 12.00% |
Bank Of Baroda | 8.70% |
IDBI | 7.00% (At discretion) |
HSBC | 7.00% |
DCB | 10.00% |
Note: Our financial partners are not limited to the above-mentioned banks. Contact Loanz360 to discuss options. The interest rates may vary subject to conditions.
FAQ
Can you use gold as collateral?
When you take out a gold loan, you are using your precious jewelry or coins as security to get quick financial assistance. It is a great option for people who don’t have enough collateral to get a bank loan. By using your gold as collateral, you can get the cash you need when you need it, and you don’t have to worry about putting up your home or other assets as collateral.
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Why gold loan is better?
When you need money fast and don’t have many options, a gold loan can be a lifesaver. You can use your gold jewelry or coins as collateral to get a loan, and then use that money for whatever you need. It’s a great option for people with insufficient collateral to get a bank loan. Plus, who doesn’t love the idea of using their gold to get some extra cash?
Does the purity of the gold matter?
Yes. To avail of a gold loan, a jewelry appraiser appointed by the lender will evaluate the gold based on the karat range of 18k to 24k. Interest rates on the gold may vary depending on the purity of the gold and the type of ornaments pledged. I.e the value of the loan will exclude any stones or impurities in the ornament.
What are the repayment modes for gold loans?
There is a wide range of repayment modes on gold loans based on the lender’s terms and conditions. The borrower may visit the bank and pay in cash his EMIs, make payment on the bank website(credit/debit/fund transfer), submit DD(demand draft), or present in cheques. Overdraft, balloon payment, and term loans are available options. Contact us at Loanz360 for more information.
What are the repayment modes for gold loans?
There is a wide range of repayment modes on gold loans based on the lender’s terms and conditions. The borrower may visit the bank and pay in cash his EMIs, make payment on the bank website(credit/debit/fund transfer), submit DD(demand draft), or present in cheques. Overdraft, balloon payment, and term loans are available options. Contact us at Loanz360 for more information.
What are the discounts on gold loans for farmers?
There are several discounts on gold loans available for priority sectors. Farmers can avail of a rebate on their gold loans of 1% to 2% and interest rates as low as 8% with most banks or lenders.
Is my credit score essential to be eligible for a gold loan?
No. Lenders will not check the borrowers’ credit scores on gold loans as the loan is a secured loan against gold as collateral. However, the ownership of gold must be proved and the borrower should be of age above 18 years. With these conditions in mind, the borrower may avail of a gold loan from any banker or financier.
Is gold loan safe in bank?
Banks and NBFCs follow strict safety protocols stipulated by RBI(Reserve Bank Of India). The pledged asset is secured in high-security vaults under 24/7 electronic surveillance. Appropriate infrastructure and measures are taken by the professionals to ensure maximum protection of your ornaments or articles.
What are my terms for prepayment on the gold loan?
Most lenders allow borrowers to prepay on loans at any time without any fee or charges for the procedure. On average if the lender agreement mentions a fee, the fee is lower and easily payable.
What will happen if I don’t repay the loan by the due?
If the borrower fails to meet repayment requirements within due time, the lender may levy a penalty fee on the borrower for the first few late payments. If the behavior is persistent or the borrower defaults on the loan, the lender will auction the gold pledged to recoup the due amount.
Do I need to have a bank account with the bank to avail of a gold loan?
Most lenders will welcome new customers to avail of a gold loan with just a few formal procedures to assess the credibility and authenticity of their new clients. However, you can avail of a loan otherwise with a familiar bank in just a few minutes. Contact Loanz360 to get a customized detailed quote on your deals and offers.
Do I need a guarantor for the loan?
No. The pledged asset on the loan will act as a security or collateral itself. However, if you are availing of a high-value loan, the lender might ask for a guarantor under rare conditions if the borrower may not meet other key requirements of the bank or the financier.
What is a MUDRA gold loan?
MUDRA gold loan is a gold scheme introduced by the Indian government. Under Pradhan Mantri Mudra Yojana with maximum benefits and minimum risks.
How much loan can I get on gold?
You can avail of an average of up to 75% of the gold value with loans extending up to 90% depending on the purity of the gold.
What Income proofs should I submit for a gold loan?
Income proof documents or bank statements are not requested by the bank or a lender to avail of a gold loan. The lender will only evaluate ID and Address proof documents along with the ownership of the gold.
Is a gold loan better than a personal loan?
The answer depends on the requirement and eligibility of the lender. For short-term and low-value loans, a gold loan is beneficial to fund instant capital requirements. For medium-to-high loan amounts, personal loans offer greater deals and offer on the loan.
Is gold loan tax exempt?
The borrower may avail of a tax exemption on a gold loan under ITA section 24 if he uses the loan acquired on a commercial or residential purchase or construction.
What is an upfront interest payment?
Upfront interest payment allows the borrowers to pay the entire interest amount at the beginning of the loan tenure and the principal amount at the time of loan maturity.
What are Gold ETF's?
ETF, short for Exchange Traded Fund is a type of government-initiated investment fund that allows a person to perform trading by trading their gold ETF units in gold investment firms or gold bullions on a stock exchange pattern. Simply put, with gold ETF, you can invest in the gold price and gold-stock ETF, i.e with companies dealing with gold mining, gold price index, or other related activities depending on the type of investment.
How to purchase a gold ETF?
In India, one can buy or purchase an ETF through open-ended mutual funds, moreover, this option is feasible and popular among investors because the money amassed through the trading process of the Gold ETF units is reinvested further in gold only and is close to the earnings of selling tangible gold.
Why Loanz360?
We work with an exclusive network of over 50 leading financial institutions across the country to provide only the best bank loans. So, we’re sure to find a solution that’s right for you. With our years of experience and intimate industry knowledge, we’ll ensure you get the best loan possible.Â
