People have been exchanging gold for currency for a long time. Besides its symbolic value, gold is important as a stable financial resource. Gold loans are secured loans in which you pledge gold products as collateral to get money for emergencies and requirements. Credit cards and personal loans are more expensive than gold loans, particularly for people looking for short-term financing. It is necessary to have complete knowledge if you are planning to get a gold loan. Read this article to understand how to apply for a gold loan easily.
Understanding Gold Loan
Secured loans made to borrowers in exchange for goods connected to gold are known as gold loans. The loan amount is typically offered as a percentage of the gold’s value. Along with having a fundamental understanding of what gold loans are, it’s critical to comprehend other qualifying factors that may impact the credit amount approved, such as the value of the gold pledged and the gold loan amount per gram of gold to get a gold loan.
Then, depending on the loan terms, borrowers must repay the loan over the loan’s lifetime in instalments to receive their gold items back. These payments can be made monthly or according to other prearranged repayment schedules. When you understand what gold loans are and how to get a gold loan you’ll see that they’re the ideal financing option for important occasions and costs like weddings or unforeseen bills.
How to Apply for a Gold Loan in India?
To be eligible for a gold loan, potential borrowers must first apply to a lender. The application for a regular gold loan needs to be filled out and sent to the relevant branch of the gold lending company. You can apply for an online gold loan using the lender’s website.
Documents Required:
The following paperwork is needed in India to get a gold loan:
- Identification proof: A copy of your passport, driver’s license, voter ID card, PAN card, or Aadhar card could be used.
- Proof of address: This includes a copy of your passport, your driver’s license, your Aadhar card, your landline or postpaid bill, your water or energy bill, or your rent agreement (together with the most recent owner’s electrical bill).
- Two current passport-size photos
Eligibility Criteria:
The eligibility requirements to get a gold loan are as follows.
- Anybody between the ages of 18 and 75 can apply for a gold loan by offering gold jewellery as collateral.
- The applicant needs to live in India.
- Loans for gold are available to professionals, business owners, traders, farmers, and independent contractors.
- Hold the identity and proof of address documents. When applying for a farming loan, you must provide documentation of your ownership of the land, such as a certificate.
How Does a Gold Loan Work?
Gaining an understanding of how gold loans operate is quite simple. To get a gold loan, the borrower must give the lender the gold in the form of coins or jewellery. As a loan amount, one may receive up to 90% of the value of the gold items pledged. Any citizen of India can apply for a gold loan if they own gold items. Once you deliver the gold item to the lender, an evaluator will determine its quality and current market value. You can begin the paperwork process as soon as you’ve accepted the loan amount and associated costs.
The money will be deposited into your bank account and the lender will retain possession of the gold (not ownership) after your loan is approved. The loan balance must be returned, along with the interest rate that the lender has established.
Benefits of Gold Loans
Some advantages of gold loans include the following:
- Your gold is used as collateral for the loan, so there isn’t much documentation to complete. All you need is proof of identity and address documentation.
- No documentation of income is required.
- At the end of the loan term, you can choose to pay the principal in one big payment or just the gold loan lowest interest rate provided by the lender.
- The interest rates on gold loans are lower than those on personal loans, so you can save a significant amount of money.
Conclusion
A gold loan is among the greatest ways to deal with unforeseen financial situations, as it provides numerous advantages. A gold loan’s only disadvantage is that you have to promise your gold to the lender. Consequently, to receive the greatest advantages, ensure that the loan turns out correctly and that the repayments are made on time.
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