India is one of the world's biggest gold buyers. According to the World Gold Council (WGC), India's annual gold demand rose by 804% from 1987 to 2016. And the pattern doesn't seem to be going anywhere anytime soon. Aside from being used for manufacturing, commercial, and investment needs, the precious metal can also be used to obtain a loan in the event of a financial emergency. In reality, a gold loan is one of the simplest and quickest ways to get money when you need it most. And if you have a bad credit score but a lot of gold in your safe, a gold loan might be the best financial option
With gold loan
becoming more common every year, it's important to understand not just what it
is, but also how it operates, gold loan interest rates, and other information.
WHAT IS A GOLD LOAN,
EXACTLY?
A gold loan (also known as a loan against
gold) is a guaranteed loan obtained from an investor in exchange for the borrower's gold articles
(within the range of 18-24 carats) as collateral. Based on the actual market
valuation and condition of gold, the loan sum given is a percentage of the
gold, usually up to 80%.
WHAT IS THE PROCEDURE FOR OBTAINING A GOLD LOAN?
The gold loan mechanism is somewhat close to that of other insured
loans. In this case, you take your gold items to a lender along with the
required paperwork. The lender assesses the gold items and verifies the
documentation submitted. The lender approves the loan amount based on the assessments.
According to the loan
arrangement, you must repay the principal sum as well as the interest amount in
order to get the pledged gold papers. Most lenders will sell a gold loan worth
up to 75% of the market value of the pledged gold. For example, if your gold is
worth 2 lakhs, you will be approved for a loan of no more than 1.5 lakhs. Aside
from the debt-to-value ratio, the loan volume is determined by a number of
other considerations, including the loan's duration and the borrower's repayment ability.
WHAT FACTORS DO LENDERS INCLUDE WHEN DETERMINING THE
SIZE OF A GOLD LOAN?
Lenders examine the purity and weight of
the pledged gold
before accepting the loan application. The market value of gold is measured
based on its present
cost, which aids in determining the final gold volume that will be
approved by lenders.
WHAT ARE THE ADVANTAGES OF
GETTING A GOLD LOAN?
A gold loan is equivalent to a personal loan except that it should
be used to fulfill your immediate financial needs, such as for an overseas
degree, wedding costs, medical emergencies, or some other personal reason.
·
Owing to the protected essence
of a gold loan, it can be processed quickly with minimal paperwork.
·
Flexibility of Usage- Since
the final use is not monitored, you have the freedom to use the loan for some
form of expense.
·
Other than the pledged gold
ornaments, you are not allowed to send any other protection or collateral to
the lender.
·
Lower Interest Rates: Since
gold is used as insurance, interest rates on gold loans are lower than those on
personal loans.
·
Gold loan is an excellent way
to collect cash and use it anytime you need funds to fulfill your financial obligations.
It's also safer to keep your valuables in a bank or financial institution's
locker than at home.
WHAT RECORDS ARE NEEDED IN
ORDER TO PROCESS A LOAN APPLICATION?
The documents needed to apply for a gold
loan differ from one lender to the next. However, the following records are
included in the standard list: Identity proof (PAN Card, Voter's ID, Aadhar
Card, etc.) and Address proof (Passport, Driver's License, Electricity Bill,
etc.) are all required. Documentation gold loan per se is utmost minimum.
WHAT ARE THE MOST POPULAR
RATES OF INTEREST AND TRANSACTION FEES?Interest
rates on gold loans vary from 9.24 % to 17 %, depending on the lender. Few
lenders often charge a servicing fee around 1% of the loan volume. Before
applying for a loan, it is often a good idea to review and match interest
rates, application fees, late payment fees, and pre-payment fees with the
provider.
TOP GOLD LOAN IN TAMILNADU
1. MUTHOOT GOLD LOAN
Among India's NBFCs, Muthoot Finance has
the largest gold loan portfolio. The organisation has been delivering reliable
services to over 2.5 lakh customers every day for the past 133 years. Muthoot
Finance's gold loans allow you to borrow money in exchange for your gold
jewellery, ornaments, and other valuables. A gold loan is the simplest way to
fulfil your financial needs if you are unable to obtain credit through
traditional banking networks or if you are unable to obtain the exact amount
you need.
https://www.muthootfinance.com/gold-loan
2. MANAPPURAM GOLD LOAN
In manppuram finance , minimum
requirements include a valid copy of a passport, driver's licence, Aadhaar
number, voter's ID, NREGA
job card duly signed by a state government officer, and a letter from
the NPR containing name and address information. One of the most recent
photographs, The Permanent Account Number, also known as Form No. 60, is a
number that is specified in the Income-tax Rules of 1962. Pay interest only for
the actual length of time that the loan was taken out and for the exact amount
of days that it was taken out. Various plans for various uses, catering to all
income levels.
https://www.manappuram.com/gold-loan.html
3. TNSC BANK
The Tamil Nadu State Apex
Co-Operative Bank Limited has launched a loan against gold scheme with a
lower interest rate to assist low-income citizens in navigating the ongoing
liquidity crisis. The gold would be worth 10% higher under the scheme than it
would be under standard gold schemes.
https://www.tnscbank.com/individual/loans/jewel-loan/
4. TAMILNADU GRAMA BANK
To meet the financial
needs of its clients, Tamil
Nadu Grama Bank provides gold loans. It is available against gold
jewellery in all of its subsidiaries. The fastest way to get money for
agriculture and related things is to take out a gold jewel loan.To obtain funds
for personal and business needs, take out a gold jewel loan. Depending on the
scheme, repayment can differ.
https://www.tamilnadugramabank.com/pgjl
5. TAMILNADU MERCANTILE BANK
1. Agriculture jewel loan
Jewel loans are provided on the basis of agricultural loans
such as crop loans, development loans, poultry loans, and fisheries loans,
among others. Interest is MCLR+0.33%
2. Non agriculture jewel loan
Gold loans for every purpose, also known as ordinary gold loan.
Interest is MCLR + 1.55%
https://www.tmb.in/jewel-loan.aspx
6. PNB GOLD LOAN
PNB provides one of the lowest
gold lending rates,
at 8.75 percent, to all current and new bank account clients. The interest rate
on a PNB jewel loan varies depending on the amount borrowed, the purity of the
gold, and the loan-to-value ratio.
https://www.pnbindia.in/personalloangoldandjewellery.html
7. ICICI GOLD LOAN
The ICICI Bank Gold Loan
is the best choice for your financial requirements. You can take out a Gold
loan for a variety of reasons, including child schooling, company extension,
down payment on a home or car, medical emergencies, family vacations,
agricultural needs, and so on. You'll get the following benefits with an ICICI
Bank Gold Loan:
·
Obtain a Quick Loan Around The
Table
·
Interest Rates That Are
Attractive
https://www.icicibank.com/Personal-Banking/loans/gold-loan/apply-now.page
8. SBI GOLD LOAN
SBI Gold Loans are obtained by
offering as collateral with SBI the applicant's own gold ornaments or gold
coins issued by banks. The application process is simple and takes little time.
The interest rate on a gold loan issued by SBI starts at 7.30 percent and goes
up from there. The sum of the gold loan will be used to fulfill a number of
financial needs. The funds should not, however, be used for speculative
purposes.
https://sbi.co.in/web/personal-banking/loans/gold-loan
9. CANARA BANK
Swarna Loan, Swarna Overdraft, and Swarna Express
Scheme are perfect for you if you need funds for
medical expenses or some other contingencies.
·
No hassle, simple loan, no
co-payment, and no promise needed.
· Interest rate that is fair
https://www.canarabank.com/User_page.aspx?menulevel=1&menuid=3&CatID=29
10. FEDERAL BANK
In Federal bank , Instant cash
against gold with low interest rate i.e 8.50% and benefits like
·
Low concern rates
·
Paperwork is minimal, and funds
are disbursed quickly.
·
The loan will be secured by a
22-carat gold guarantee. ornaments made of gold
https://www.federalbank.co.in/federal-gold-loan
11. Bank of Baroda
Bank of Baroda has launched “Retail Gold
Loan Shoppe” across India to provide easy and fast gold loan to the public.
Attractive interest rates, maximum loan value, easy repayment schemes are the
highlights of Retail Gold Loan Shoppe by Bank of Baroda.
They have also provided advanced Maxsell
Gold purity testing machines to these branches and ensure the gold loans are
processed quickly with maximum gold loan value to the consumers.
https://www.bankofbaroda.in/advance-against-gold-ornaments-jewellery.htm
Similarly, when it comes to transaction
fees, Federal Bank is the safest bank to take a loan against gold because they
have the lowest processing fees of Zero Charges. According to the current rates
as of 09 April 2021, Manappuram and Federal Bank are the top lenders providing
the highest gold loan amounts.
More and more companies and banks are
expanding and improving their gold loan portfolio across Tamilnadu and India as
Gold loan will grow upto Rs. 4617 Billion by 2022 as per a survey conducted by
KPMG firm. Gold loan is going to be the best credit option for both consumers
and the lenders, as it can safe guard the interest of both the parties.
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