A Complete Guide About Gold Loan Process and Eligibility

A gold loan is a type of secured loan where the borrower pledges such gold possessions as collateral to a lender. Gold loans have emerged as a famous option amongst individuals in the country, who want to unlock the arbitrary value of the gold jewelry or ornaments to meet their immediate financial requirements. The quick personal loan process in India provides a convenient as well as an accessible way for individuals to access funds quickly, frequently without the requirement for extensive documentation. Such kinds of loans are beneficial for those seeking a quick way to obtain funds for financial emergencies.

The gold loan process is seamless as well as owing to the collateral-based approach, both parties are safeguarded from the risks involved. The borrower usually does not necessarily have to worry about credit score as well as for the lender, the value of gold serves as security against the amount of a loan. It is considered the easiest way to fulfill the financial requirements as well as proves to be a sensible alternative to taking loans from banks or NBFCs.

What is the Gold Loan Process?

A gold loan process that involves 3-4 easy steps of obtaining funds for emergency utilization. It is an accessible and hassle-free way to easily meet a sudden financial requirement. Following are the steps involved: –

Step 1

The foremost step in availing a gold loan is to apply either to a bank or a non-banking financial company abbreviated as the (NBFC). For the same, one can go to the branch or lender’s office to apply in person, or one can apply online, as the convenience of digitisation has advantages for everyone in several ways. One can also easily apply for home service, as various banks as well as NBFCs in certain countries offer.

Step 2

In such a step, the gold loan eligibility amount will be evaluated. If one has opted for a home service, then a representative may get in touch with one and come to the home to examine the gold possessions. This is done to see whether the application meets the eligibility criteria or not.

Step 3

The next step is the documentation process. Lenders for example banks or NBFCs follow the guidelines set by RBI to complete the overall KYC process. As it requires to be handy with the documents neccesary for a gold loan. Documents that are mandatory for the gold loan procedure in India are understood as follows:

• PAN Card, AADHAR Card, Driving License, Passport, and so on that can be proof for photo identity information to avail gold loan.
• Address identity proofs like sales deed, rent agreement, utility bills, voter ID card, driving license, and so on.
• Passport-size photographs.

Point to Remember: In order to meet the gold loan eligibility criteria is compulsory for availing a gold loan.

Step 4

The last step is the approval stage where the applicant requires to confirm the terms & conditions. For the purpose of the lender’s approval, the loan amount will then be credited to the account of the borrower. Processing fees for the loan amount may necessarily vary.

Details of eligibility criteria for a gold loan

Residents of India are also eligible for availing gold loans. The applicants must also consider have:

• Gold jewelry or ornaments tend to pledge for the gold loan.
• Applicants must be above the age of 18.
• The value of the gold loan will be considerably determined by the weight of the gold items, the pledge, the current gold rate in the market, along with the purity of the gold.

Factors to Remember: It is a significant secured loan critically independent of such scores of credit.

What are the features that make gold loans the best?

• The total processing time on gold loans is frequently faster as the documents required for the gold loan process are considerably minimal.
• Unlike quick personal loans, gold loans charge highly low interest rates. Thus, one can answer all the financial worries with a substantially high loan amount and low interest.
• In most cases, banks and NBFCs do not usually charge any kind of processing fees and even if they do, it is typically between 0.25 to 1% of the amount of a loan.
• As gold loans are a form of secured loans, most lenders do not usually ask for any income proof or credit history.
• Financial flexibility is critical for borrowers to easily manage their repayment obligations effectively. Gold loans tend to provide numerous repayment options, to involve flexible repayment schedules as well as the choice of partial payments or full repayment at once.

As these unsecured loans where lenders rely solely on the borrower’s creditworthiness, a quick personal loan provides a secured avenue for individuals to access funds, leveraging the inherent value of the respective gold holdings. As these dynamic factors have a role to play in determining the price of the gold, there’s no denying that it is one of the greatest and safest ways to avail a secured loan when the requirement usually arises.