According to a report, the gold loan segment in India witnessed a 33.8% growth in FY 2021. This growth can be attributed to the demand for capital among the middle class, especially.
The secured nature of a gold loan makes it an ideal option for borrowers needing a sustainable financial backup. Considering the current economic scenario, RBI has leveraged the LTV ratio for the said credit form to 90%.
These factors indicate a suitable time for interested applicants to avail of an online gold loan. Here are few simple steps to avail of a gold loan without hassle.
What are the steps to make a gold loan application?
Every Indian household keeps a certain amount of gold passed down as an heirloom. This asset holds a substantial value in the Indian market. Therefore, the capital appreciation for gold is mostly on the lucrative side.
Taking a gold loan helps potential borrowers to leverage their gold equity. The steps for making an application for the said credit form are discussed below.
- Visit a preferred lending institution’s website
- On the homepage, select the gold loan
- Fill form with personal details like name, contact info, and loan amount required
- Check the eligibility and documentation
- Submit application
- A representative from the lending institution will contact you to initiate processing
Alternatively, individuals can give a call to a lending institution and state their loan requirements. The loan amount is disbursed to a borrower’s account after they pass the eligibility and document scrutiny conducted by a lender.
In this regard, having a clear idea about these mandatory parameters would streamline the application process.
What are the eligibility criteria for a gold loan?
Due to its secured nature, eligibility parameters set for loan against gold are simple and easy to fulfil. Some of the common requirements include-
- An applicant should fall in the age bracket of 21 to 70 years.
- Individuals must possess sufficient gold articles
- Self-employed, salaried business owners, farmers, and traders with an income flow can avail of the funds.
Apart from fulfilling these basic eligibilities, individuals need to submit certain lender-specific documents. These papers authenticate an applicant’s reliability. The basic requirements include-
- Address proof
- Documents to prove identity such as Aadhaar, PAN, voting card, driving license, etc.
- Income proof
- Documents related to the gold.
These simple eligibility and document requirements make it an ideal financial source during emergencies. Individuals can avail of the said credit to finance their big-ticket expenses like medical bills, education, traveling, home renovation, etc.
Individuals can also gain certain additional benefits that make it a useful credit form. Some of them are discussed below.
What are the features and benefits?
- Substantial credit amount
Life runs on uncertainty where arranging funds for paying medical bills or big-scale expenditure forces individuals to deplete their savings.
When facing such urgency, availing of a loan against gold seems hassle-free. One can avail substantial funds against the value of pledged gold and cover the necessary expenses without any restriction.
- No need fora CIBIL score
A gold loan doesn’t mandate the need for maintaining a high CIBIL score. Potential borrowers can avail of the said credit by fulfilling simple eligibility parameters.
- Easy repayment
The gold loan also offers the borrowers the flexibility of repayment. Individuals can choose to repay the loan’s interest in instalments or repay it in one go. This gives them the flexibility to settle principal based on their financial stability. Borrowers preferring the traditional repayment methods can opt for the EMI structure.
- Part release facility
Gold loan borrowers can avail of additional facilities like a part release. Individuals get the option to release a certain amount of gold articles equivalent to their pre-payment amount. However, the credit proportion depends on a lending institution’s policy.
Apart from the mentioned features, some best lenders also extend additional facilities like robust security features, higher LTV and likes. However, to find the cheapest gold loan in India, it is best to put in some time for market research. In addition, it is smart to know the factors that affect the gold loan interest rate.
These are some of the best features that make it an ideal borrowing option. However, individuals need to keep a tab over eligibility parameters and documentation to streamline their application. This will help individuals to avail a gold loan make the most out of their equity.
Additional Read – 5 Reasons Working Capital Loan Can Work for Your Business
