What is a Gold Loan?
Loan against gold or gold loan is a secured loan. The gold jewellery you own is submitted as collateral to the Non-banking financial company (NBFC) or bank from where the loan is obtained. Loan against gold Loanbaba is approved the same day (sometimes as less as 45 minutes to 2 hours), when the loan application is approved. This loan can help you meet any urgent need of cash. Different gold assets are eligible to get the loan on, but mostly the preferred gold type is jewellery and coins and not biscuits or bars.
Loanbaba gold loan has certain benefits, such as quick processing time, low interest rates, medium term tenure etc. The gold jewellery as security as released to you once you repay the loan with the interest and principal amount.
Why Choose Gold Loan?
If you require instant cash, then loan against gold is your best choice. Approval of this loan does not depend on your credit history or income, but is judged on the value and purity of the gold. The valuation of gold is done on spot by a professional at bank/NBFC providing the loan. The gold loan amount depends on amount of gold provided as security to the financial institute.
- The loan against gold come with flexible and medium term tenure that allows you to repay the loan quickly.
- It has low interest rate starting from 10.50% to 13.50%, which makes the repayment amount smaller than unsecured loans.
- Minimal documentation required, such as identity proof, address proof, and documents such as salary slips, bank statements, IT return etc is not needed.
- Prepayment penalty is not charged by all financial institutions, and some may exempt these charges.
- Disbursal assured the same day of loan approval. Loan can be given in just few hours.
Points to Consider Before Applying for a Loan against Gold
To apply gold loan online at Loanbaba, you must remember the following points:
- Only gold jewellery you own will be accepted as security for the loan.
- You can get up to 75 percent of the gold value. Loan amount is between Rs. 50 thousand and Rs. 50 lakhs.
- The loan amount is determined after analyzing the weight of the gold in the jewellery and its quality.
- If the jewellery has other precious metals or gems, then those will not be considered in determining loan amount. The gold value will be as per current market price.
- Tenure of loan is from 6 months to 2 years.
- The financial institutions will offer free security for gold ornaments.
- Interest rate falls between 10.50% and 13.50%, and is subjected to change.
Security of Gold Loan
The gold pledged with the bank/ NBFC itself acts as the security for the loan and the loan is thus fully secured. Hence there is no requirement of any collateral security.
Loan against Gold Tenure
Gold loan can be repaid up to a maximum of 2 to 3 years.
Fees for Gold Loan in India
The various fees which can be applied on gold loan are- penalty for non-payment of interest, processing fees, charges for late payment, valuation fees, etc.
Repayment Options for Gold Loan India
Gold loan features different repayment options as per the requirement of the individual borrower. They are:
- EMI-Equated Monthly Installment
- One has an option of paying the interest in lump-sum and then clearing the principal amount in one go at the end of the loan period.
- One can also opt for paying the interest portion on monthly basis while clearing the balance (principal) afterwards in a single installment.
Rebates on Loan against Gold
The lenders (banks and NBFCs) offer discount on the interest rate of gold loan in India if borrower agrees to pay the interest portion regularly. The rebate can be up to 2% on the prevailing rate of interest.
Features and Benefits of Gold Loan Online
Here we list the benefits and features of loan against gold in India:
- There are no likes such as unsecured gold loans, and all loans against gold are secured in nature. This is why it is easier to get the loan within a short time. Your credit/CIBIL score need not be high.
- You have to pay only the interest component throughout the tenure of loan. The principal amount is paid in lump sum after the loan tenure ends.
- There are special gold loan schemes for women, agriculturists, small businesses at reduced interest rate.
Categories and 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 than other gold loan schemes.
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 institute 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 Overdraft Loan
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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 is also dependable on 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.com.
- Any individual can apply for loan against gold. The borrower should own the gold jewellery on which the loan is to be taken.
- Approval for loans online is subjected to valuation of the gold submitted to the bank or NBFC.
- You can apply for a gold loan if you are above 18 years of age. No special requirements about income are needed.
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 you are done filling some basic personal details online at Loanbaba.com, and get benefitted with fast approval and disbursal of loan on gold.
- 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. 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. Secured loans carry a lower rate than unsecured loans, and the interest rate of gold loan will depend on the amount, tenure and other factors.
Checklist to Apply for Loan on Gold
Below mentioned is a complete checklist to remember before you apply online for gold loan.
- Loan on gold rates may differ from one financial institution to other. At Loanbaba.com, you can compare the best options for the loan.
- These loans are only to fulfil urgent monetary need as the tenure is up to 2 years only. If you need long term loans, then you can contact us for other funding options.
- Though your credit or CIBIL score does not matter for gold loan, you can know your CIBIL score for free at Loanbaba, and understand your credit worthiness for other loans.
- The value determination of the jewellery will be based on current market price of the gold.
- If you are unable to repay the loan, then the lending institute may not release the collateral gold so as to recover the unpaid loan amount.
- Loan against gold repayment will impact your credit score. To build a good CIBIL score make sure you repay the loan in time.
Top Providers for Gold Loan 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 , 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 with our website.
- Axis Bank: Axis Bank has a unique scheme which flaunts for its speedy delivery. The bank assures immediate disbursement of the loan. 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: This scheme features minimal documentation. As per the bank, one can get the gold loan under this scheme with minimal documentation requirements and convenient procedure. The quantum of loan which can be granted per gram of gold is comparatively high under this scheme. The maximum loan which can be sanctioned under this scheme is Rs. 1,500,000.
- Muthoot Finance: This NBFC features gold loan at minimum rate of interest. One can avail any amount of gold loan in India at Muthoot Finance with a minimum of Rs. 1,500. Muthoot Finance also features variety of schemes for gold loan suitable for different types of customers.
- HDFC Bank: The bank offers gold loan in India under the name “Sampoorna Bharosa” at an attractive interest rate which features instant delivery of the loan. The minimum amount of loan under this scheme is Rs. 50,000.
- Mannappuram Finance Limited: This NBFC offers gold loan at a lower rate of interest with instant delivery. The company has various gold loan products in India to satisfy various needs of different customers.
- Kotak Mahindra Bank: The bank features quick disbursement of loan with minimal requirement of documentation. The amount of loan sanctioned per gram of gold is quite high as compared to the gold loan
Gold Loans Interest Rates of Top Banks/NBFC
Gold Loan EMI Calculator
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 amount borrower. You can access free-of-cost Gold Loan EMI calculator at our website to check for the exact EMI amount to be paid. But, for gold loan, you have to pay just the interest amount till the loan tenure end. When the loan tenure ends, you can then pay the remaining principal amount. After complete repayment, your gold ornaments will be given back.
Why Choose Loanbaba.com to Help You Find Gold Loan?
At Loanbaba.com you can access unbiased compared of gold loan or loan against gold over several NBFCs and banks. We offer you free financial tools such as gold loan EMI calculator and gold loan eligibility calculator and other services. Here are some of the gold loan features at our website, which will convince you as to why choose us to help you get the right gold loan schemes in India.
- You do not have to visit any financial institution to apply for gold loan, rather you can apply for gold loan online and it takes only 2 minutes or less to apply at our website.
- You get quick quotes from top financial institutes that offer loan on gold in just a few seconds.
- We provide you best gold loan online schemes based on your needs. You can grab quick quotes from financial institutions offering loan on gold, within just a few seconds.
- You can easily compare gold loan offers, and then select the lending institute and apply with it. The loan is disbursed the same day it is approved.
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1. Why do I require a Gold loan?
If you have any urgent financial need, then your gold ornaments can easily unlock cash. If you own gold jewellery then you can use it to get emergency funds the same day the loan apppcation is approved.
- The funds can be utilized to fulfil any financial needs. You can take gold loan for travel trips, marriage, home repair, vehicle purchase, education, shopping essentials, medical expenses, etc.
- Low interest rate on gold loan makes it feasible compared to unsecured loans. Loan against gold is thus budget-friendly financing method.
- You do not have to carry the burden of debt for a long time since the repayment is up to only 2 years.
- You have to pay only the interest amount till the loan tenure and principal amount can be paid at the end of the tenure. Thus you can manage repayment comfortably.
2. How do I apply for Gold loan online?
You can apply for gold loan online at Loanbaba.com on comparing the banks/NBFCs offers on loan amount, interest rate, loan period, and other details.
- It is easy to check your loan EMI and eligibility for free at Loanbaba.com.
- The loan online application takes less than 2 minutes to complete.
- The application process is paperless. You do not have to submit hard copies of the documents.
- When the verification of documents is done, and gold valuation in terms of purity and weight is checked, and application of loan approved, the loan amount is disbursed instantly.
3. What happens to my loan against gold when the gold prices fall down?
In case the gold price drops over a month, the financial institution may request you to pay partly for the loan. Gold loan is given up to 75 percent of the gold you pledge , which is evaluated at current gold price. LTV (the loan to value) will base on purity of gold. Also, LTV is determined from a running average of gold cost for a month or up to 3 months. LTV can differ by some amount, but depends on the calculation system by the financial institute. If the gold price drops, the bank or NBFC drops the LTV for gold loan.
4. What kind of jewellery will get me best gold loan per gram or best gold loan rate?
There is no specific condition about which gold jewellery will fetch better gold loan rates, as the gold valuation depends on the gold weight and purity and not its types. Some of the well-accepted forms of gold ornaments are necklaces, anklets, rings, bangles etc. If the ornament has other valuable metals or precious stone, the loan amount will still be considered on the gold present in the jewellery.
5. When will I get back my gold ornaments?
You will get back the gold ornaments kept as security in few days of completing the repayment of the loan (both interest and principal component). Until then, the jewellery will be kept securely with the bank or NBFC.