You are facing a cash crunch amid this COVID pandemic due to passive economic activities but cleverly while you were making good money you had invested in purchasing gold items. So how will you use these gold items to get some cash to boost your business? Should you sell your long term investment for temporary Cash retain?
Don't worry, you have a solution as every problem has, you can manage your budget easily without selling any of your gold items which you have kept for a long time, earned by investing a large saving of your income. You just need to pledge your gold items which will help you advance for a loan amount, this is a type of Secured loan called Gold loan.
The gold items provide the security against the loan amount granted by a lender which is commonly known as collateral. The loan amount can be up to 90% of the value of your property, earlier it used to be 75% but to compensate the customers more feasibly Reserve bank of India has taken this step to provide higher margins for the gold loan borrowers.
Thus by enabling yourself to get a gold loan you can manage the shortage of your fund and excel your business to meet the challenges established by the sudden outbreak of this pandemic and economic slowdown.
Availing a gold loan is easy and quick, a few steps need to be followed while applying for a gold loan either from a bank or an NBFC ( Non-banking Financial Company ).
Search for a high LTV value: LTV stands for Loan to value ratio. Suppose your gold item has a value of 10 lakhs then as per new RBI rules you are eligible for getting a maximum loan amount of Rs 9 lakh which is 90% of the value of your gold item. But many financial institutions may provide you less than 90%, so always search for an organisation which pays you higher to meet your requirements.
Low-interest rate: Always compare interest rates being offered by various institutions, it will make your debt look low during the repayment. Try to bargain as much as you can for availing a gold loan.
Fulfil the eligibility criteria: Read the eligibility criteria ( predetermined set of terms and conditions laid down by the lender), check it online and make sure you are fit for availing the loan facilities. If you don't fulfil the eligibility criteria then take your time and apply later once you are eligible.
Documentation: Keep your necessary documents ready. Basic documents like PAN, Identity proof, age proof, Proof of residence should always be kept ready while applying for a gold loan. Go through the list of documents 2-3 the times so that your loan gets easy approval. Documentation can be done at the doorsteps by bank executives.
Take the offers: Many times financial intuitions provide offers to their valued customer, ask the bankers if it is available for you. It will help you a few adjustments which will result in economic assistance for you.
Read the terms and conditions carefully: Before depositing your gold items to the lender ask them to clarify every information related to the value of your items, repayment methods, conditions in case of non-payment of your debt amount so that no chaos arises later and your property remains safe.
Here we have brought features and details of the gold loan by Canara Bank :
Canara Bank Gold Loan Rate of Interest: 7.0% per annum
Canara Bank Gold Loan Per Gram Rs. 5,340
Age of Borrower: 18 – 75 years
Maximum Loan Amount: Up to 1 crore (with Income Proof)
Maximum Loan to Gold Value Ratio: Up to 75%
The purity of Eligible gold:18 carat to 22-carat gold
Maximum Loan Tenure: Up to 12 months
Gold required: Minimum 10 gms
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