How Gold Loan Works
A Gold Loan is a loan given against gold. It is a very simple concept where you pledge gold ornaments, coins, biscuits, bars, etc. The lender provides you with liquidity at a predetermined rate of interest.
The loan is sanctioned after examination of necessary documents and evaluation of gold pledged. The money is given in the form of cash, account transfer and sometimes demand drafts. The whole process is quicker than other loans offered in the market.
Features of Gold Loan:
1. You can acquire the loan amount up to 80 – 90% of the value of gold.
2. There is no need to sell gold ornaments to acquire money.
3. The entire loan amount can be repaid whenever possible. On the repayment of the loan, your gold is back with you.
4. It is a short term loan varying from 3 months to 12 months.
5. Even an unemployed person can avail of this loan.
Evaluation of Gold:
The process to evaluate gold varies from lender to lender. The Loan is sanctioned on the basis of weight, purity, and the current market rate of gold. The karat range of gold is 18 to 24. The value or weight of precious stones, if embedded in the gold jewels is disregarded.
The documents required for a gold loan are very few. Usually, the documents required for a gold loan are loan application, proof of identity, proof of signature, proof of address, and two passport-sized photographs. There is less documentation required for Loan
Rate of Interest:
As the gold loan is a secured loan, the rate of interest on loan offered is lower as compared to an unsecured loan. The rate of interest ranges from 10 to 20 percent Loan.
Apply online for Gold Loan:
You can apply online as well as offline for Gold Loan. There are many banks such as HDFC Bank, ICICI Bank, Muthoot Finance, Axis Bank, etc. You can apply easily online with Dialabank to get the best offers.
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