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 is an inert commodity that is rarely used to generate revenue, so liquidate it. As a result, a 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.
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 that ranges from 1-3 % 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. MUTOOTH 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.Check out here: 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.Check out here: 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.Check out here: 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.Check out here: https://www.tamilnadugramabank.com/pgjl
5. TAMILNADU MERCANTILE BANK
- 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%
- Non agriculture jewel loan: Gold loans for every purpose, also known as ordinary gold loan. Interest is MCLR + 1.55%
6. PNB GOLD LOAN
PNB provides one of the lowest gold lending rates, at 8.75 percent, to all current and new bank 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.Check out here: 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
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
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