Gold is one of the most valuable metals and was often used in olden times as a medium of barter or exchange. A country’s wealth was decided by the amount of gold available in its royal reserves. Now people tend to diversify their asset portfolio by investing in gold and gold bonds. The basic advantage of having gold as an asset is that since it is a precious metal whose demand doesn’t go down much, if you buy cheap now there’s always a possibility of arbitrage, meaning you can sell it at a higher rate later. Often if you invest in gold, you can later use it to obtain loans against the same. This is the purpose of this article, how to apply gold loan online?
What are Gold Loans?
A gold loan is nothing but the loan that you take out against gold items. It is a secured loan that comes with its own set of clauses and conditions. The borrower offers his gold items as collateral against a definite sum of money or loan principal amount, which he’ll have to repay next within a stipulated period. The main point about gold loans is that it is an easy fix to your immediate money problems requiring the least bit of documentation. Usually, a certain percentage of the current valuation of gold kept as collateral is offered as a loan amount since any amount higher or in the full worth of the gold would increase the risks of lending and possible default.
Gold loan is an easy loan option for anybody seeking immediate cash. Nowadays, many farmers are opting for gold loans because of the attractive interest rates and high loan amounts. In case of emergencies, farmers find difficulty in collecting instant money because of already existing debts. Therefore, farmers opt for gold loans as they simply have to pledge gold articles to receive the cash without submitting any income proof or previous loan documents.
How to Apply for a Gold Loan?
To understand how you can have a gold loan apply online process completed. You need to first check and understand the eligibility criteria for gold loans, the kind of gold items you can pledge to keep as collateral, how to shift through the interest rates and then go for the one you find most suitable. Read on to know more.
Check out the eligibility criteria for gold loans
Gold loans are a great way to finance your personal needs and especially for individuals who don’t qualify for other loan options requiring sufficient documentation and identification. You need to be of Indian origin, have a sufficiently decent credit score, and have the gold of recommended purity and weight. The underlying security here is the gold item itself, in case you fail to complete your debt in due time, you’ll be losing out on your pledged assets.
Check out interest rates and compare
The next step is quite important. You are looking to take out a loan against your gold items, so make sure that you don’t default on it and end up losing your possessions. This requires careful consideration of the rates of interest offered on the gold loans across all sectors. Go for the one that offers the least interest rate since then the amount you have to pay back also reduces as does your monthly EMI rates. SBI bank offers a rate of 9% to 11.5% p.a on gold loans, the lowest offered by any bank.
Calculate the EMI amount with your online gold loan EMI calculator
This step tells you how to apply for and calculate the amount payable on your gold loan, via EMI. An online gold loan eligibility calculator is where you put in the details of your gold balance. The amount you are seeking against it and they’ll show you if your offer is viable. Whether you’re eligible to apply under the lender’s credit scheme. Usually, they take into consideration your principal loan amount, the rate of interest, the timeframe of loan repayment. Then provide you with the amount you’ll have to pay back in total as well as in monthly instalments.
Fill in details on the application form and submit
Usually, these include your details, credit score or income balance sheet, your job profile, the purchase bills of your gold items and your KYC documents. For identification, you need to upload your Aadhar, Voter or PAN details or even the Driver’s License. Then click on apply.
Wait for sanctioning
If the deal passes then you will hear from the institution or get a sanction letter. Stating the key loan terms including the interest fees, repayment tenure, processing fee and transaction charges.
We hope that the above article provides a detailed insight on how and when to apply gold loan online. The easiest way to understand your valuation of the loan at the end of the repayment tenure, seamlessly.