Individuals often have a variety of doubts, questions, and enquiries while searching for the best gold loan options. Hence, knowing the answers to these vital questions is essential for having a quick, hassle-free gold loan application process.
Here are 10 questions borrowers often ask while applying for a gold loan:
- Who can opt for a gold loan?
Individuals older than 18 who possess gold artefacts to pledge can apply for the best gold loan deals. This can be a salaried or self-employed individual, a homemaker, or a farmer.
- What kind of gold can I pledge?
You can pledge valuable gold belongings to avail of a gold loan, like gold ornaments, jewellery, etc. The value you get for the pledged gold depends on its purity.
- Is it safe to keep my gold with lenders?
It is entirely safe to keep your gold ornaments with lenders. Gold loans are professionally safeguarded and managed by lending institutions in secured vaults with 24×7 camera surveillance. Additionally, some lenders insure the pledged gold, so you still receive an equivalent amount in case of theft.
- How long does it take to sanction a gold loan?
The best gold loan application procedures are quite simple and speedy. With the proper documents, individuals may get same-day gold loan sanctions.
- What are the documents I have to provide?
Here are the required documents:
- Identity proof:
- Aadhaar card
- PAN card or Form 60
- Address proof:
- Ration card
- Utility bills, i.e., electricity or telephone bills
- Signature proof:
- Passport
- Driver’s license
- 2 passport-sized pictures
If lenders ask, individuals need to submit their income proof.
- What are my repayment options?
You may repay your gold loan amount in payable EMIs. Additionally, gold loan applicants can choose to pay their interest upfront and repay their principal at their repayment tenure’s end.
- What is a gold loan EMI calculator?
A gold loan EMI calculator is a free-to-use online tool that aids applicants in accurately and instantaneously calculating their payable EMIs and interest amount. You only need to enter a few requisites, such as:
- Gold purity, in karats
- Gold weight, in grams
- Principal amount
- Monthly interest rate
- Repayment tenure, in months
This online tool helps you better choose from the best gold loan deals.
- What is a gold loan’s repayment tenure?
Typically, a gold loan’s repayment tenure ranges from 3 to 12 months. In some cases, this can extend up to 30 or 36 months. Some lenders provide renewal options to extend the repayment tenure.
- What fees are involved in a gold loan?
All best gold loan options have up to a 1% standard processing fee of the total loan quantum. Some lenders also charge a valuation fee, while others do not. Thus, this fee varies according to the lender. Additionally, some lenders levy renewal charges based on stamp duty fees and loan quantum. Therefore, borrowers must conduct their due diligence and compare lenders before settling on one.
- Banks vs NBFCs? Which to choose?
According to the RBI, banks and NBFCs provide a gold loan LTV ratio of 75%. Here is how banks and NBFCs compare when it comes to gold loans:
- Banks offer lower interest rates than NBFCs.
- NBFCs:
- Offer options to pay interest during repayment tenure and principal upon its end.
- Easier documentation procedures than banks.
- Provide faster loan disbursals than banks.
- Do not levy any prepayment penalties.
Therefore, NBFCs provide a variety of advantages over banks. However, banks offer lower interest rates than NBFCs. Hence, the best gold loan options depend on the needs and requirements of borrowers.
