A gold loan is a secured loan where gold jewellery or ornaments are deposited as collateral or security by the bank or lender. The gold loan is given to the applicant against gold jewellery and ornaments as security or collateral. Moreover, gold loans do not even include a high processing fee to be charged.
If you wish to avail of a Gold Loan, then there are some points that everyone should know regarding Gold Loan as given below :-
Tenure of Gold Loan :- The tenure of the gold loan is quite flexible and varies from different banks and lenders. Yep, the tenure period is when you are supposed to return the principal amount of the loan along with monthly instalments. So, the longer your tenure for repayment, the higher your interest rate on the gold loan. Whereas, if you have good relations with your bank or lender, you might get a reasonable tenure for your gold loan.
Minimum eligibility criteria :- Under gold loans, eligibility criteria are essential in quite a limited region; for instance, an age which should lie between 18 years to 70 years, plus the profession of the borrower is also a crucial criterion for the sanctioning of a gold loan. A credit score is not that significant for applying for a gold loan because it is a loan with a loan sanctioned against collateral or security. However, borrowers opt for gold loans when they want to improve their bad credit scores.
Processing fees :- These are the charges reimbursed by the applicant to the lenders or banks for the period between the compliance of the loan application and the period when the bank or lender approves of the application which was submitted to the bank or lender for the evaluation process; these are the charges that lenders and banks take for checking the application form and verifying the documents along with it. Now, these charges change from different banks and lenders. Such as, some banks and lenders might not charge a processing fee, whereas others might charge as low as 1%-2% on the other hand, others might take it in the form of a particular percentage on the whole amount of the gold loan or ₹ ten onwards. It depends on the bank or lender. Therefore, negligible processing fees are charged by banks and lenders on gold loans, which makes the borrower’s process relatively easy and reasonable.
Repayment tenure :- Every loan has a repayment tenure that is an end date of the gold loan period. Within that term, the borrower is accountable for paying back the principal amount along with the monthly instalments he is liable to. However, gold loans are short term loans, they can be paid back within a short period, such as a minimum of three months. And one can verify their monthly instalments through the Gold Loan Calculator. This is available on every bank’s online website, which means you do not have to visit the bank branch.
One can check the monthly instalment just by using your device; almost every bank provides this facility. such as the SBI Gold Loan Calculator. In this way, you can check the suitability of your pocket and accordingly plan on paying back the monthly instalments and the principal amount within the stipulated time.
These are some of the easy ways in which you can apply for a gold loan along with submitting a few documents that the banks and lenders ask from you such as identity proof: PAN card, Aadhaar card, passport etc. address proof like Aadhaar card, passport, Voter-ID card, electricity bills, water bills, telephone bills etc. and some additional documents like passport size photographs etc.
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