An A To Z Guide To Gold Loans: All You Need To Know
Evaluating key factors of whether to take a gold loan is crucial. This article provides you with all the information you need for deciding whether to take a gold loan
indiagold team
28 Mar 2022
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Indians are known around the world for their passion for gold. Being one of the world's largest gold importers, gold is regarded as having significant value and as a possible source of future financial appreciation in India. However, few people realize that gold can be used to cover any unexpected cash needs, such as business start-up, medical bills and children's education, automobile down payments, and even yearly family vacations.


When a scenario arises that necessitates immediate cash, you might use the gold in your bank locker that has been sitting idle.


How do gold loans work?


The gold loan process is very similar to that of other secured loans. In this case, you take your gold items to a lender along with the necessary paperwork. The lender assesses the gold items and confirms the paperwork presented. The lender approves the loan amount based on the evaluations. According to the loan agreement, you must repay the main amount and the interest amount to receive the pledged gold objects.


Are gold loans safe?


Borrowing against gold is quickly becoming the most popular financing option, as institutions charge lower interest rates than other types of retail loans, such as personal loans. Gold loans are 100% secured loans, so if there’s a lapse in repaying the loan amount within the loan duration, then a higher interest rate will be charged, or you may lose the gold as well.


Benefits of Gold Loan


Quick Processing Charge-free


Because gold loans are secured by genuine gold, financial institutions can easily give them. Lending against gold is safer as financial institutions can quickly sell the gold if the borrower defaults. As a result, they typically disburse such loans within a few hours. Hence, processing times are reduced, resulting in more convenience for borrowers.


Low Interest Rates


With indiagold, you get gold loans at just 0.85% interest per month (10% per annum). In contrast, banks and other financial institutions give personal loans at 15% interest per annum. Minimal Documentation


Gold loans require the least amount of documentation because secured collateral is already in place. With indiagold, you’ll just be required to fill up a form and your relationship manager will be there to help you through your gold loan journey.


Poor Credit History Doesn’t Matter


In most cases, the bank determines the loan amount based on the borrower's repayment capabilities and credit history. This is not the case with gold loans, though. Because gold is used as collateral, lenders are confident in the repayment of the principal component and do not base their decision on the borrower's credit history.


How to calculate your gold loan interest rate?


You can easily calculate your gold loan interest rate with the help of indiagold gold loan calculator. All you have to do is fill in the karat amount of gold. It should be 18K and above—the weight of gold in grams and the loan amount you want. Since indiagold has gold loan schemes ranging from less than 2 lakhs to above 5 lakhs, the rate of interest will change as per the loan duration.


How to get a gold loan?

Getting a gold loan is a very simple process.


Step 1 - Request For A Gold Loan


Go to indiagold and select the goal loan scheme you like. Tap on “Apply Now” below any of the schemes or give a missed call at 1800-123-999-888. An indiagold loan advisor will call you back and guide you through the schemes.


Step 2 - Get Doorstep Visit by Loan Manager


Your loan application will be processed by a loan manager who will come to your home. It takes less than 30 minutes to complete the process.


Step 3 - Instant Money Transfer in your Bank Account


Following the approval of your application, funds are immediately paid to your bank account. Your gold ornaments are packed and sealed in secure GPS-enabled packages right in front of your eyes.


Step 4 - Gold Is Safely Stored in Secure Vaults


The loan manager safely takes your gold and places it in secure vaults after the money has been deposited into your account. The moment your gold leaves your home, it is insured and becomes our responsibility. From the indiagold app, you can close your loan or pay your EMI.

Conclusion

In Indian society, pledging gold is no longer considered taboo and shameful. This explains why gold loans are now commonly accepted as a technique of acquiring finances for urgent needs by people from all walks of life. Some people do it because they believe it is more private than going to a local moneylender. In addition, as gold prices have risen, banks have begun to encourage customers to take out gold loans. As modest personal financing has grown in popularity, the transactions have gotten increasingly popular.


FAQs

What are the documents required when applying for a gold loan?


Please deliver the following documents to a designated loan manager when they come to your location to kickstart your loan application:


  • Identity Proof - Aadhaar Card, PAN Card, Voter ID, Passport, or Driving License
  • Address Proof - Aadhaar Card, Voter ID, Passport, Driving License, Utility Bill (Phone/Gas/Electricity/Water/Broadband, etc.) / Lease Agreement of a local address that matches the address on your utility bill (in case your permanent address is different from your current residential address)
  • Form 60 or PAN Card
  • Passport size photograph

What type of gold do you accept for gold loans?


At indiagold, all forms of gold jewelry are accepted, provided it is 18K and above. No gold coins, biscuits, and bars are accepted. The value and purity of gold are measured and assessed by experts and trained valuers.


What are the consequences of missing a payment on a due date?


The interest rates are subject to jumping interest rates if a payment is missed due to unforeseen circumstances. The consumer will also be contacted by the loan manager to discuss the problem. Hence, indiagold advises making timely payments to take advantage of lower interest rates.


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