EVERYTHING TO KNOW ABOUT GOLD LOANS
Gold Loan
These are secured loans that are offered by almost all financial institutions nowadays. Although this concept originated in the pre-independence era in a comparatively unstructured manner, it has now evolved into an important financial product that some financial institutions are highly trusted. Owed to the relatively more hassle-free procedure of getting these loans, most people prefer gold loans over other types of loans.
Who can apply for a gold loan?
Ideally, anybody who has valid documents to present and gold to keep as collateral can apply for this loan. Since this loan does not need proof of income or past financial details, literally all kinds of people can apply for it. It is however seen that people running businesses apply for these loans as they often need quick capital without having to run around for all the documentation and paperwork. People in various other professions can also apply for this loan as they do not need any proof of employment or income.
What is a gold Loan?
This is a secured loan wherein the bank or financial institution keeps the gold as collateral and lends money. Here, the gold acts as security again and the borrower gets the money without showing any proof of income or ITR. The bank calls for an evaluator who assesses the quality of your gold and then tells the bank its value in INR. Based on this evaluation the bank lends the money, which is usually 90% of the gold value. It is also important to know that the banks do not consider the value of precious stones etc. that may be embedded in the jewellery and always consider the value after deducting the weight of these embellishments.
When to apply for a gold loan
An individual should apply for a gold loan if he/she is in dire need of cash at a short notice and has the means to re-pay the borrowed money. Also, before opting for the loan, people can also use the gold loan monthly interest calculator and selfevaluate their potential to repay that. Mostly, this loan comes in very handy for businesses when a sudden need for some liquid money arises or during medical emergencies. Reputed financial institutions ensure that people can get a gold loan without much hassle and their belongings are stored away safely till the loan term.