Gold loans are a top pick when someone requires immediate liquidity. The best part about them is that borrowers are free from the stress of maintaining a good credit score. Due to its client-centric approach, gold loans are the most considered loans in India. Moreover, the availability of online gold loan via an online application process makes it more convenient for clients who want a quick approval process.
Suppose you are considering applying for a gold loan. Then here are the important things that you must know of:
Know of you are eligible for an online gold loan application:
There is no specific guide of gold loan eligibility you need to follow when applying for it. However, a person above 18 years of age with a good holding of gold in any form is always eligible for applying for it. Once these two needs are fulfilled, you can sanction gold loan amounts easily. Usually, the lender will offer you loan sum spending on the number of gold assets you submit to your respective lender.
Know what gold loan documents you will need at the time of application:
Unlike other loans, where paperwork is the most important and lengthy process, basic KYC papers are the gold loan documents you’ll need. These characteristics make the online gold loan application process quicker.
Here are the simple KYC documents you’ll need to submit:
– One or two recent passport-sized pictures of yours.
– A clear copy of identity proof documents such as your driving license, passport, ration card, Aadhar Card, etc. Make sure your details are visible in copies.
– A clear copy of address proof papers. These include your telephone bill, electricity bill, and other types of utility bill etc.
Important things about online gold loan applications that you must know beforehand:
- In general, gold loan-providing institutions provide loan amounts up to 75% of the current gold value. However, it may fluctuate after evaluating your gold assets, where the quality and weightage of your gold assets are tested.
- All kinds of golden ornaments and pieces of jewellery are acceptable in the form of collateral while applying for an online gold loan in India. Furthermore, gold coins of specific types can also be used for the same. Usually, banks are more open to gold coins.
- However, to keep in mind, if you own gold bars, it might be hard for institutions to accept them as a security deposit. Several lenders don’t allow gold loans through gold bars.
- If your ornaments are made up of a combination of other valuable metals or stones, then that would be of no use during the valuation process. Only the weightage of the gold portion is considered for finalising the loan sum.
- The tenor of gold loans is usually limited upto 1 to 2 years. Two years is the maximum repayment duration that a borrower can have. Therefore, before you submit your gold loan documents to your lender, make sure you can repay them within this duration.
- In general, gold loan rates are lesser in comparison to different unsecured loan plans.
However, the rate of interest can vary with different lenders. Therefore, you must compare your options thoroughly.
- You must repay your gold loan sum along with the interest rate to avoid hurting your creditworthiness. If you didn’t pay the full gold loan sum within the specified period, your lender would have all the rights to seize your assets.
You get benefits of minimal gold loan documents, faster approvals, and easy cash transfer by the lender while you apply for an online gold loan. As mentioned earlier, your loan provider, an NBFC or bank, has legal rights to keep your gold asset and even sell it if you default on your repayments. Also, some cases have been defaulting the innocent borrowers, hence always doing a background check before opting for any of the loan institutions.
Borrowers can opt for Bajaj Finserv Gold Loans and avail loan amounts of up to Rs. 1 crore by pledging their assets.