Indians are among the largest consumers of gold in the world. That is because gold is considered to be among the precious metals, and it is part of Indian traditions to consume gold jewellery during special events like weddings and religious festivals. Indian temples are also filled with idols ornamented with gold jewellery.
Gold jewellery is not just a great source of investment, but also a smart way to get instant money and meet your financial requirements. People collect gold jewellery to get instant gold loans during contingencies. Gold finance is a great way to access funds without compromising your finances.
A gold loan is a secured loan provided by banking and non-banking financial institutions. It requires you to pledge your gold jewellery as security to get an instant loan. Since the lender is ensured of receiving the loan amount, you can get flexible repayment tenure and a lower gold loan rate.
Things to consider to get an instant gold loan with your gold jewellery
Since your gold jewellery is pledged as security to the lender, there are minimum eligibility requirements. Anyone who is a legal owner of gold ornaments can apply for gold finance. However, he/she must be 18 years old a the time of application or 65 years old at the end of the loan tenure.
Lenders usually don’t consider your income, age, and credit score to approve your loan application. However, some lenders factor in your repayment capacity even though you have pledged your gold jewellery as security against the loan amount.
A piece of advice; if you fail to make payments, the lender has the right to put your gold jewellery for auction and recover the loan amount. Make sure to pay the loan along with interest on time.
Before opting for gold finance using your gold jewellery, always consider the gold loan rate that you will get. Although the interest rates offered in a gold loan vary from lender to lender, it is usually lower than other personal loans.
There are cases where NBFCs offer lower gold rates compared to banks. However, it is subject to your payment capacity and the value of your gold. So, look for a lender that can offer you a competitive interest rate while applying for a gold loan.
You can use your gold jewellery to get a higher loan amount as the value of gold is always high. The principal loan amount is calculated based on the Declared Insured Value (IDV) of your jewellery. It would be advisable to assess your needs and finances and opt for a gold finance amount that you need.
Your lender is at no risk as there is no chance of default in payments. The reason why people opt for gold finance is that you can opt for flexible repayment options. You can use Muthoot gold loan EMI calculator to determine how much you can afford to pay every month.
You must opt for a gold loan only if you are sure that you can repay the loan amount within a chosen tenure. You can claim your gold from the lender once you make the complete payment with the gold loan interest rate.
Given the fact that an instant loan against gold jewellery is a secured type of credit, the application process, loan approvals, and disbursal are quick. You can apply for a gold loan and get the amount dispersed within 24 hours.
To apply for a gold loan, you will need to visit one of your lender’s branches and submit your gold for valuation. The lender will calculate the value of your gold on the spot, and determine a loan amount you are eligible to borrow.
You will then be asked to fill a mandatory application form and submit relevant KYC documents such as identity proof and address proof. Your instant gold loan application will be approved within 24 hours.
You can pledge your gold necklaces, bracelets, earrings, and rings as security to get an instant gold loan. The loan amount depends on the purity of gold which ranges from 18 to 24 karat. However, there is a certain gold weight permissible by the Reserve Bank of India to disburse gold finance against gold jewellery.
A gold loan serves multiple purposes. You can use the loan amount to pay for education, medical emergency, or plan an international trip.