What is a Gold Loan?
A gold loan or loan against gold is a loan provided by banks or NBFCs against the gold jewellery submitted by borrower, as collateral. You can pledge gold ornaments and only bank-purchased gold coins. The funds can be utilized to fulfil any financial needs. You can take loan for travel trips, wedding expenses, home repair, vehicle purchase, education, shopping essentials, medical expenses, etc.
- The gold in question must be 20 carats and above. Loan is not provided on other forms of gold such as gold bar, biscuit, wires, etc.
- This loan is secured, where gold is kept as collateral until you do not repay the loan completely (principal amount + interest amount).
- Financial institutions offer triple-layered security to the gold, without any charges. In case of non-repayment the bank/NBFC has the right to keep the gold with itself.
On loanbaba.com you will find all information about gold loans. You can compare and apply for a loan against gold on the website.
Features of Gold Loan
Below given are features of Gola Loan:
- The loan to value ratio (LTV) is maximum 75% of the gold’s current market value. The gold loan amount will depend on the LTV, gold’s weight, and its purity. Contents in the jewellery apart from gold will not be considered to calculate the loan amount.
- The loan amount offered by financial institutions is between Rs. 1 lakh to Rs. 1 crore.
- Loan disbursal is done the same-day of the loan approval. You can get the funds in as less as just 45 minutes. Thus, it is an ideal option if you want instant cash.
- Low interest rate starting from 10.50% up to 13.50%. There are special gold loan schemes for women, agriculturists, small businesses at reduced interest rates.
- Gold loan tenure is between 6 months and 2 years.
- No credit score check is not mandatory but having a credit score of 600+ helps.
- Minimal documentation involved: Identity proof, address proof, and recent passport-sized photographs. No need to submit bank statements, salary slips, and IT return proof.
Types of Gold Loans in India
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Type of Loan on Gold
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Gold Loan Features
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1) Gold Loan for Women
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Low interest rate charged that charged to other customers.
The loan is offered only to women customers.
Both salaried and self-employed women can apply for gold loan.
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2) Agriculture Gold Loan
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This loan is given to agriculturists and farmers to pay for farming and agriculture needs.
The loan tenure is up to 2 years.
The loan amount maximum is Rs. 5 lakhs but can differ from a financial institution to other.
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3) Personal Gold Loan
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The funds are provided to meet any financial needs. Minimal paperwork.
The disbursal of loan happens the same day. Anyone above 18 years of age can apply for this loan and repay in 2 years.
Interest rate is below 13% to 14%.
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4) MSME Gold Loan
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These loans are given to small and medium sized enterprises.
It is meant to fulfil needs of rural borrowers and extended to MSMEs.
Loan amount is based on gold value at current market rate of the gold asset submitted.
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5) Gold Loan Overdraft
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This loan is given against gold jewellery invested in the bank. This jewellery can then be pledged with the same bank to avail a loan.
Borrower can withdraw the amount with ATM card. The borrower should have at least a gold overdraft account with the chosen bank or NBFC.
The loan tenure is renewable, but is 2 years at the most for every loan period.
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6) Term Loan on Gold
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Term loan against gold is a loan which has special offers for borrowers, based on loan tenure chosen.
Some banks and NBFCs can provide discounted rate of interest for loan on gold valid for a shorter period.
The loan amount also depends on the chosen tenure.
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Eligibility Criteria for Gold Online Loans
Given below is a set of eligibility criteria for online gold loan apply with Loanbaba.
- Anyone can apply: regular income group, professionals, salaried, businesspersons, homemakers etc.
- No minimum income required
- The applicant must be of at least 18 years of age
- Gold ornaments should be at least 20 carats and above
Documents Required to Apply for Gold Loan
If you want gold loan urgent then do not worry, just submit the gold jewellery for valuation at the bank after applying online, and get the funds in a jiffy.
- Two passport size photographs.
- A copy of identity proof document (any of the following): Ration card, driving license, Aadhar Card, Passport, etc.
- A copy of address proof documents (any of the following): Utility bill, telephone bill, or electricity bill, etc.
Gold Loan Interest Rates in India
The loan against gold interest rate is between 10.50% and 13.50%. But these rates are subjected to changes as per the policy of RBI and bank/NBFC.
- There are no collateral free gold loans, which goes to say that the gold jewellery against which the funds will be taken, has to be kept as security with the bank.
- Women, farmers, and MSMEs can get the loan at discounted rates.
- Secured loans carry a lower rate than unsecured loans, and the interest rate of gold loan will depend on the loan amount, tenure and other factors.
Top Providers for Gold Loans in India
Both banks (private and public sector) and non-banking financial companies provide loan against gold India. However, some of the major providers you can check out are: Muthoot Finance, Manappuram Finance, Allahabad Bank, HDFC Bank, SBI (State Bank of India), ICICI Bank, Bajaj Finserv, Axis Bank, etc. If you need gold loan from these or any other providers, you can compare gold loan, select, and apply for it on our website.
- HDFC Bank:One of the most popular HDFC bank gold loan scheme is “Sampoorna Bharosa”. It is offered at an attractive interest rate. The minimum amount of loan under this scheme is Rs. 50,000.
- Axis Bank:Axis gold loan can be disbursed within 2 hours. The amount of loan that can be availed under this scheme is between Rs. 25,001 and Rs. 2,000,000. Edge loyalty points can be earned on this transaction.
- ICICI Bank:The quantum of ICICI Bank gold loan is calculated per gram of gold, and is comparatively high against other financial institutions. The maximum loan which can be sanctioned under this scheme is Rs. 1,500,000.
- Muthoot Finance:The Muthoot Finance gold loan amount starts at Rs. 1,500. This NBFC features a variety of schemes for gold loan suitable for different types of customers.
- Mannappuram Finance Limited:This NBFC offers gold loan at a lower rate of interest than many banks, with the feature of an instant fund disbursal.
Gold Loans Interest Rates of Top Banks/NBFC
Gold Loan EMI Calculator
Gold loan India can be repaid in many ways, as mentioned below:
- EMI- Equated monthly instalment or EMI is the amount paid every month towards loan repayment. The EMI comprises of both principal and interest component of the loan.
- Pay the interest amount in lump-sum and at the end of tenure, repay the principal amount.
- Pay the interest component every month till loan’s tenure. After which, you can repay the balance principal amount in a single instalment
You can access free-of-cost Gold Loan EMI calculator at our website to check for the exact EMI amount to be paid.