Wednesday 27 February 2019

Gold loan explained through FAQs.

  1. What is a Gold Loan?
The financial institutions sanction gold loan after the borrower deposits the personal gold as a mortgage. It is often used as a short-term household requirement by the person applying for a loan by collecting gold ornaments that they possess.
The financial institution keeps the gold as security and provides you with the loan amount. You get back the gold once you clear EMIs.

  1. What is the interest rate for a gold loan?
Many financial institutions in India provide a gold loan. Gold loan Interest rate vary for each bank and financial institutions. You can visit the website of each lender and check the rates.

  1. How do I qualify for a gold loan in India?
There are two requirements to avail the gold loan:
       Your age should be 18 years or more.
       You must possess some gold for a mortgage. 

  1. How long it takes to complete sthe formalities of a gold loan?
The loan approval process of gold loan is comparatively swift and very fast. If your application fulfils all the requirements, you get the loan within hours.

  1. How much is the maximum amount I can obtain for a gold loan?
The maximum amount that you can obtain for a gold loan depends on the lender. Generally, the range is between Rs. 1,500 and Rs. 1 crore. The amount depends on your eligibility criteria and lending power of the banks and financial institutions.
If you are looking to borrow a large amount, then banks are a safe option against some other financial institutions who provide gold loans.

  1. What is the repayment duration for a gold loan?
The repayment duration of the gold loan depends on the lender. It can be anything beginning from one day up to 48 monthly instalments.  

  1. Do I need to pay any additional fee while availing the loan?
You have to pay a processing fee and a gold validation charge for availing the loan. These charges are different for each bank and financial institution. In general, the processing fee is quite nominal and not more than 2 per cent of the loan amount.

  1. What is the medium of repayment of a loan?
You can repay the loans through multiple mediums. Some major ones are as follows:
       Cash
       Demand Draft
       Cheque
       Online Fund Transfer

Things to remember: Read the terms and condition carefully and consult an expert in case of confusion before signing for a gold loan.

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