A gold loan is a secure loan that has a security assurance by a gold item or items. It is the most preferred borrowing option in times of need due to its fast availability. Despite the availability of other investment and financing options today, there is no emphasis on the value of a gold loan. A gold loan is an excellent way to address an immediate financial necessity. It also acts as a Credit Tonic, as simply putting your gold in a safe and securing a low-interest loan will help you enhance your credit history. It is advisable to check the eligibility of a gold loan before applying, just as you would check the Gold Rate in India before making any new gold purchase. 

How is Gold Loan Amount Calculated?

The sort of security that is supplied determines the amount of the gold loan. The maximum loan amount you can get against a gold item is decided by its weight and current market value at the time and date of the loan application. Other factors such as the sort of gold used and the borrower’s ability to repay the loan are also taken into account. Furthermore, coins and bars have a higher value than jewellery, with up to 80% of the gold’s value delivered following appraisal. A gold loan becomes more accessible as a result of this attribute, as well as having a greater loan-to-value ratio.

Eligibility for a Gold Loan

Anyone who owns gold jewellery is eligible for a gold loan. Generally, it is only available to people above the age of 18 years. You must show a piece of gold jewellery to the branch in order to secure the loan (the gold piece would be within the carat range of 18K to 24K). The cost of the gold jewellery may fluctuate in response to changes in the Gold Rate in India.

Moreover, there is some Documentation process that the applicant needs to be fulfill to apply for a house loan. You also need to meet certain eligibility criteria. Since this is a secured loan against a gold object, the paperwork does not include any proof of income. As a result, you simply need the following basic KYC documents:

  • Two passport size photograph 
  • ID Proof such as Driving Licence/PAN Card/Form 60/61/Passport Copy/Voter ID Card/Aadhaar Card/Ration Card. 
  • Address Proof such as Driving Licence/Voter ID Card/Ration Card/Aadhaar Card/Passport Copy/registered lease agreement with not older than 3 months utility bills in the name of landlord.

How to Apply for a Gold Loan Online in India?

You can apply for a gold loan by both online and offline methods, just like any other loan. Despite the fact that the majority of customers prefer to do business in person, lenders are increasingly giving gold loan choices online. Simply go to the lender’s official website or compare online and fill out the required information. The information you must include in the online application form is as follows:

  • Borrower’s Full Name
  • Email Address 
  • Phone Number 
  • Pincode of the city 

After you submit the form, a representative will contact you. Following the verification of the gold as well as your personal details, your application will be process further.

Once the loan provider authenticates the gold and the properly completes the application form, a gold agreement is signed. After that, the gold is handed to the lender, and the debt is paid out. When the documentation is completed, the loan is issued promptly. Because other other loans take at least a day to disburse, this is the quickest way to get a loan. Almost every lender allows credit card payments through the internet. The procedure for repaying an online gold loan is simple. To access the payment desk and finish the online repayment process, enter your login ID and password from your online application. Cash, EMI, check, and DD are just a few of the payment alternatives available. Banks process the loan and the payout only after the proper verification of the gold that the applicant provides. If the gold item is fake or stolen, or that it is lacking a bill or that the paperwork is not genuine, the chances of rejection rise. Otherwise, there are low chances of rejection because the loan is provided based on gold grade and simple KYC documents.

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