Lenders have seen a huge increase in demand for gold loans within the past few months. Several small businesses used goal loans to manage their cashflows.
For an example of the business trend, for Federal Bank, gold loans grew 67% year-on-year within the December quarter.
If you’re going for gold loans currently, do keep a couple of things in mind. Gold loan costs have decreased in recent months. Some lenders have modified the tenures and are incentivising borrowers to repay monthly or additional ofttimes. Muthoot Finance, as an example, is providing a rebate for monthly interest payment.
Typically, most lenders supply gold loans for up to a one year tenure. A couple of banks like Kotak Mahindra Bank or Bandhan Bank offer gold loans for a tenure of 3 years or additional, according to the data from Paisabazaar.com. However, some lenders allow the borrowers to increase the tenure. The tenure depends on the kind of loan type and EMI options that the applicant chooses.
Only a couple of banks like Kotak Mahindra Bank or Bandhan Bank offer gold loans for a tenure of 3 years or additional.
Like several different loans, the public sector banks provide very low gold loan interest rates, followed by private banks. Interest rates that non-banking financial companies provide are the very best among all lenders.
Lenders typically settle for gold ornaments that are between eighteen and twenty-two carats. Most lenders settle for up to 50 grams of coins and 24-carat purity if you provide bank-minted coins as collateral.
There are multiple charges in the gold loan. Besides process charges, there’s a stamping charge, analysis charge; some lenders also can have proceeding charges, etc.
Lenders will raise additional collateral if gold costs fall, like within the recent months. If the recipient doesn’t repay or supply additional gold, lenders will charge a penalty and even sell the gold after many reminders.