India’s gold loan market is predicted to exceed Rs 4500 billion by 2022. Gold loans fall under the category of secured loans. In other words, to get a gold loan, an individual need to pledge collateral.
Collateral can be any asset owned by the borrower that he or she needs to pledge to the lender as security against the sanctioned loan amount. If due to certain circumstances, the borrower fails to pay the loan amount back within the tenure, the collateral pledged by the individual will be auctioned by the lender to get the capital again.
In case of, the borrower has to pledge gold as collateral in to get the loan amount. The maximum approved loan amount is also dependent on the amount of gold that the borrower guarantees.
Why get gold loan?
There are times when you are in urgent need of cash to deal with your financial emergencies. It may be to clear some medical bills, renovation of home, planning a spontaneous trip or any other financial needs. At times like this, you can use the gold laying in your locker that you do not see yourself using in the near foreseeable future as collateral to get gold finance. But the major question that arises is why get gold loan of all the multiple options in the market. Well, gold loans have numerous exciting features to offer. We are going to discuss a few of those features to clear your doubts about gold loan whether or not it is a viable option.
Affordable interest rates
Gold loans are offered by multiple lenders at an affordable interest rate, usually ranging from 10% to 12% per annum. It signifies that the borrower will not need to pay too much overall interest in addition to the redemption amount. It will also reduce the amount of equated monthly instalments that the borrower is supposed to pay, increasing the individual’s monthly savings. There are sites which can give you a direct comparison between interest rates charged by various lenders to help you shortlist the one that best suits your finances.
Pliable repayment options
Gold loans offered by the lenders usually have flexible repayment options, keeping in mind the diversity of income levels that the borrowers have. There are sites that can show you a direct comparison between features of various schemes. The borrower has the liberty to choose the loan scheme that best suits his or her financial capability. You can also use an online EMI calculator to evaluate the exact amount of equated monthly instalments that you are supposed to pay, to give you a better idea about how to deal with your finances in advance.
Get a gold loan irrespective of your credit score
CIBIL score or credit score is a three-digit score, ranging from 300-900, assigned to an individual based on his or her last six months of financial data. An individual with a good CIBIL score is considered to have financial stability in life and hence are preferred by the loan lender. Personal loans and some other types of loans are pretty strict with the applicant’s CIBIL score and thus are only sanctioned to the one with a good CIBIL score.
On the other hand, are approved, even for applicants with a poor CIBIL score since gold is already taken as collateral against the loan for security.
How to get gold finance quickly?
It is not difficult to get gold finance in India. Gold finance comes with very few eligibility criteria. In other words, there are a lot fewer restrictions in getting gold finance as compared to others. Let us talk about the few eligibility criteria.
Eligibility criteria for getting a gold loan
–The individual must be a citizen of India of age 18 and above and below 75 years to be eligible to apply for a gold loan
–The gold that the individual is willing to pledge has to be of 18 to 22 karats. The purest form of gold is of 24 karats, But since gold is liquid in its purest form, it has to be alloyed with other metals to give it a shape. Hence, golds are usually found with a purity of 14 to 22 karats in the market. There are a few criteria that need to be met to apply for a gold loan.
Choosing the best gold loan scheme
There are multiple gold loan lenders offering at different interest rates. To get the best gold loan scheme, you need to scrutinize a bit about all the options and find out the one, best for you. There are multiple structured EMI options available too. Use a gold loan interest and EMI calculator to find the perfect scheme for you.