Gold has cultural as well as emotional significance for people in India. Moreover, gold also has high financial value and so people can use it to acquire gold loans at the time their financial need.
Compared to other loans, the process of getting a loan against gold is simple and hassle-free. Many financial institutions offer instant gold loan to borrowers, which are customer-friendly.
Benefits of instant gold loans
Selling gold items to acquire funds can be difficult due to the sentimental value attached to them. This is why availing of a gold loan is a good option since it gives people an opportunity to recover their pledged items after making the necessary payments.
Due to the rising popularity of gold loans in India, NBFCs offer many attractive perks to their customers on gold loans. Here are some of them-
1. High loan value
Since the amount of gold loan a person can get depends on the value of their asset, borrowers can get a loan of up to Rs. 2 crore. Moreover, lenders offer a high loan-to-value (LTV) ratio of 75% on these loans since the market value of gold is high.
2. Multiple repayment schemes
Borrowers can choose from a variety of repayment options for gold loans according to their financial standing which makes it easier for them. The repayment methods are as follows-
- Paying interest in instalments and the principal at the end of loan tenure
- Clearing the total debt amount including loan principal and interest at the end of tenure is known as bullet repayment of a gold loan.
- Paying the interest and principal sum through a fixed monthly EMI.
3. Low-interest rates
Compared to other loans such as personal loans, interest rates of gold loans is lower since they are secured. Competitive interest rates on these loans make it easier for the customers to pay back loan amounts without any financial burden.
4. Zero foreclosure fee
Loan providers give borrowers the option to pay the entire loan amount before the completion of the loan tenure at no additional charges. This allows borrowers to enjoy being debt-free before time. Moreover, they can also choose to pay a part of the instant gold loan amount according to their convenience.
5. Minimum documentation
Processing other loans such as business loans requires a lot of paperwork. However, people can complete the process of availing of a gold loan by submitting any 1 of the following documents-
- Voter ID
- Aadhaar card
- Driving license
In case of availing of a loan of more than Rs. 5 lakhs, the lender may ask to submit a copy of the PAN card.
6. Long loan tenure
Lending institutions provide tenure of up to 12 months on gold loans to borrowers. This gives them enough time to plan the repayment of the debt amount according to their needs.
7. Free insurance for gold
When an individual takes a instant gold loan, lenders also provide complementary gold insurance on the pledged items. This provides safety to the items against theft and misplacement.
Apart from the benefits mentioned above, it is also extremely convenient to apply for a gold loan.
Gold loan application process
Eligible candidates who are Indian citizens of age between 21-70 years can follow these steps to apply for a gold loan:
Step 1: Visit the website of your preferred gold loan provider.
Step 2: Navigate to the gold loan application form section.
Step 3: Enter your full name as mentioned on your PAN card.
Step 4: Select your city of residence and input your 10-digit mobile number.
Step 5: Click on ‘get OTP’ option to receive OTP on your verified number.
Step 6: Input the OTP value to complete the verification process.
After completing these steps, a representative from the lending company will contact the applicant to guide them through any additional requirements.
Prospective borrowers can also use the free gold loan calculator tool available on the lender’s website to get an idea about loan repayment liability before applying for a loan. This tool will calculate the gold loan EMI based on interest rate and loan tenure.
Applicants should remember that the gold items they pledge to attain funds should be 22 karats for the lenders to sanction loan. Apart from that, it is also advisable to check the other factors carefully to avail of an instant gold loan with ease.