Terms and Conditions of Gold Loan

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Terms and Conditions of Gold Loan

Terms and Conditions of Gold Loan

Gold Loan is a secured service that allows people to overcome the financial crisis with the help of gold ornaments. In this service, the applicant just has to put gold ornaments as collateral in the banks in return for money. Before applying for a Gold loan one must be aware of the terms and conditions of Gold Loan.

After the applicant repays the loan amount, the gold ornaments are given back to the applicant. Furthermore, the service of Gold Loan is one of the fastest-growing services as The Gold Loan Interest Rates are quite reasonable and less in contrast to other loans. 

Following are the Terms and Conditions of Gold Loan:

Tenure: The service of Gold Loan can be availed from 6 months to 3 years. The applicant can choose the tenure according to their need and comfort. Furthermore, the applicant also has an option of renewal of the loan.

Interest Rate: The Gold Loan Rate that you get on the loan is a fixed rate of interest and this is also mentioned in the sanction letter which you get during loan disbursement. The Interest Rate charged by the lenders starts at 10.55% per annum

If you skip or fail to pay interest rate timely, then you may face legal action from the bank regarding the recovery of dues. Even then if you don’t repay the amount then the bank has the authority to sell the gold. Furthermore,  If we talk about pre-payment or a part payment, interest is recovered upfront; there will be no option of a refund.

Eligibility for Gold Loan

  1. Being eligible for a gold loan is easier in comparison to other loans:
  2. To begin with, the age of the applicant should lie between 18 years to 70 years.
  3. Secondly, the applicant should be a citizen of India.
  4. The quality of gold should be from 18 Carat to 22 Carat in order to get a loan.
  5. Another equally important criteria are the weight of gold which should be more than 10 grams.
  6. Anyone can apply for a gold loan whether you are a salaried applicant or self-employed.

Penalty Charges

If there’s any pre-payment of part payment penalty then the bank will recover that sum at the time of prepayment or part payment of the loan. And, if you fail to repay the amount of loan, your gold ornaments will be confiscated by the lending institution.

Charges Terms and Conditions of Gold Loan

You will be liable to some charges like Storage charges, valuation charges, processing fees, Insurance Premium, stamp duty. Also, Front ended interest which will be payable upfront. You will see the deduction of this amount from the loan amount that has been sanctioned to you by the bank.

A net amount (after deduction of charges and interest) will be dispensed by a method for account credit into Transferred via RTGS/NEFT/Demand Draft/Cash.

Mode of Repayment

The mode of repayment will be as follows:

  • Interest payment front-ended and principal at maturity.
  •  Monthly interest payment and principal at maturity.

Quality Check

Bank will be at liberty to check the quality and quantity of gold to be pledged with the Bank every now and then for review investigation because of security reasons. Such a check won’t take place in your absence (you will get a seven days notice).

If you don’t arrive at the time gold verification the bank will carry on the procedure in your absence and if any defect found, then you need to prepay the loan with extra interest.

Documents Required for Gold Loan

The documents should be particularly from the following options

Applicant Identity Verification Documents can be amongst the below  documents (ANY):

  1. Passport: Valid Copy of passport both front and last page
  2. Voters ID card: Copy of Valid Voter Identity Card
  3. Driving License: Copy of Driving license which is valid.
  4. Adhar card: Copy of Aadhar Card with current information

Applicant Address Verification Proof can be amongst the below documents(ANY):

  1. Passport: Valid Copy of passport both front and last page
  2. Voters ID card: Copy of Valid Voter Identity Card
  3. Driving License: Copy of Driving license which is valid.
  4. Adhar card: Copy of Aadhar Card with current information
  5. Utility Bills on the name of the applicant.
  6. Sales Tax Certificate
  7. Rental Agreement

Signature Verification Documents required are namely:

  1. Valid Copy Passport
  2. Bank’s Verification Certificate
  3. Cheque.

The applicant applying for Gold Loan must be aware and accept the terms and conditions of Gold Loan to avail the benefits and Gold loan amount instantly. These terms and conditions of Gold Loan Should be accepted while applying for a gold loan.

The above are the terms and conditions that one should keep in mind while availing of a gold loan.

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