Often in life, we find ourselves in dire need of instant funds. It could be to pay for our children’s higher education or to meet hospital expenses of a loved one. What do you do in such a situation? One way to go is to take a personal loan, but the process could take some time. In such a time, you can let that gold sitting idle in your bank locker to come to your rescue. A loan against gold is a great, hassle-free and quick finance option as your gold serves as collateral. You require minimum documentation. Banks can sanction your loan amount depending upon factors like the purity of gold, its form (jewellery, biscuits, coins or bars) etc. Here’s what you should consider when taking a loan against gold.
Where can I get a gold loan?
You can get a gold loan from various banks like SBI, Axis Bank, HDFC Bank, ICICI Bank etc. Alternately, you can also visit financiers like Mannapuram and Muthoot.
The Quantum of the loan: Two factors are taken in account by banks and financiers while sanctioning the amount of the loan. The first is that you can get an amount depending upon the security that you deposit in the form of gold. Gold in coins, bars and biscuits is preferred over jewellery, since the value of the latter can be diminished owing to making charges. Typically, you can get a loan for 60% of the value of your gold, after valuation. The second factor is the individual’s repayment capacity as banks need to access how long it would take for you to return the bank’s money.
Documentation and charges: You can either procure a gold loan online, or visit the bank. Keep in mind that not all bank branches are designated to provide gold loans, so you may have to visit a specific branch. You can make your case stronger by providing all the necessary documents as listed on the loan application form. You would be asked to provide your address proof, identity proof, PAN card and photograph. Banks will charge you a fee for both, processing the loan and for valuation of gold.
Depositing gold: When you submit the application along with the specified documents, the bank will draft up an agreement stating the terms of the loan, which would include the monthly instalments, the rate of interest and the tenure of the loan. The bank will evaluate your loan and disburse it accordingly. It will also keep custody of your gold until the entire loan is repaid. Gold loans are mostly offered for a period of 12 to 18 months.
Default in loan repayment: For whatever reasons, in case a person defaults in repaying the loan against gold within the stipulated tenure, the bank can assume custody of your gold. As per the terms mentioned in the loan agreement, the bank has the rights to sell of your gold to recover its dues.
Where can I get a gold loan?
You can get a gold loan from various banks like SBI, Axis Bank, HDFC Bank, ICICI Bank etc. Alternately, you can also visit financiers like Mannapuram and Muthoot.
The Quantum of the loan: Two factors are taken in account by banks and financiers while sanctioning the amount of the loan. The first is that you can get an amount depending upon the security that you deposit in the form of gold. Gold in coins, bars and biscuits is preferred over jewellery, since the value of the latter can be diminished owing to making charges. Typically, you can get a loan for 60% of the value of your gold, after valuation. The second factor is the individual’s repayment capacity as banks need to access how long it would take for you to return the bank’s money.
Documentation and charges: You can either procure a gold loan online, or visit the bank. Keep in mind that not all bank branches are designated to provide gold loans, so you may have to visit a specific branch. You can make your case stronger by providing all the necessary documents as listed on the loan application form. You would be asked to provide your address proof, identity proof, PAN card and photograph. Banks will charge you a fee for both, processing the loan and for valuation of gold.
Depositing gold: When you submit the application along with the specified documents, the bank will draft up an agreement stating the terms of the loan, which would include the monthly instalments, the rate of interest and the tenure of the loan. The bank will evaluate your loan and disburse it accordingly. It will also keep custody of your gold until the entire loan is repaid. Gold loans are mostly offered for a period of 12 to 18 months.
Default in loan repayment: For whatever reasons, in case a person defaults in repaying the loan against gold within the stipulated tenure, the bank can assume custody of your gold. As per the terms mentioned in the loan agreement, the bank has the rights to sell of your gold to recover its dues.
No comments:
Post a Comment