Andhra Bank Gold Loan

Andhra Bank Gold Loan is up to Rs. 25 lakhs for a maximum tenure of 1 year. The applicable rate of interest starts from 9.40%. The rate varies according to the loan amount, LTV, and purity of gold. You can avail of the loan by pledging your gold jewellery. The fund is available for urgent personal expenses such as marriage, children's education, financial emergencies, business purposes, etc. The bank benefits customers with low-interest rates, quick processing, and large branch presence.

NOTE: From 1 April 2020, Andhra Bank has been merged with Union Bank of India. So, for the updated scheme for a gold loan and interest rate details, visit the official website of the Union Bank of India.

In this post, we will discuss Andhra Bank Gold Loan features, eligibility criteria, interest rate, documents required, and frequently asked questions.

Features of Andhra Bank Gold Loan

Here are the details:

• The rate of interest is up to 10.15%. The lowest EMI per Rs. 1 lakh is Rs. 8,760 for a 1-year tenure
• Acceptable gold jewellery of purity of 18 to 22 Carat. The maximum weight of gold is up to 50 grams
• The Union Bank of India/Andhra Bank provides gold loans to meet expenses for crop production and creation of assets for farming operations or related activities such as poultry, dairy, fisheries, and more
• It may also offer loan for working capital needs such as the purchase of inventory, business expansion, renovation of premises, etc
• Or, it may provide the loan for contingencies and unforeseen situations such as medical treatment, education, ceremonies, and others
• The loan to value ratio is up to 75% of the gold’s market value. But the loan amount is determined on the fineness of the asset, and the purpose of the loan
• In the case of agriculture gold loan, the scale of finance is decided on the actual requirement or crop production need

Eligibility Criteria Andhra Bank Loan against Gold

Here are the eligibility norms:

• The eligible customers are individuals over 18 years of age
• Resident individuals, businessmen, salaried people, self-employed professionals, pensioners, students, and housewives can apply

Andhra Bank Gold Loan Interest Rate

The lowest rate offered on the loan is up to 10.15%. The Andhra Bank Gold Loan Interest depends on the following factors:

• Loan Amount: The quantum of finance is Rs. 10,000 to Rs. 2 crores as per the erstwhile scheme by Andhra Bank. But as per the Union Bank of India, the loan amount is up to Rs. 25 lakhs.The rate per gram depends on the gold purity and loan to value ratio. The bank usually provides a lower rate for a higher borrowing amount, and vice-versa.
• Tenure: The period of the loan is from 3 months to 12 months. A lower rate of interest is possible on long tenure. But you can save on interest pay-out by choosing a shorter tenure. Compare the cost of the loan on a short and long tenure, before taking a call.
• LTV: The maximum loan to value ratio fixed by the RBI is 75%, which was updated to 90% in the pandemic era. The bank offers higher LTV if the net weight of the gold and its purity is high, vice-versa. The interest rate on a lower LTV loan is lower than a loan with a higher LTV.
• Purpose of the Loan: A gold loan is a secured borrowing. Several schemes are around agricultural purposes. In these schemes, low rates or concession on standard rates apply. This is because farming comes under the priority sector for lending. The discount on the rate is by 1% to 2%.
• Relationship with the Bank: The bank may offer preferential rates for loyal customers who have a good track record with payments and other financial activities. It may offer a few discounts to customers based on their credit practices with the bank.

Documents Required Gold Loan Andhra Bank

Here are the documents required for loan application:

• You have to submit KYC documents
• Provide a government-recognized identity and address proof
• Any identity proof such as Voter’s ID Card, PAN Card, Passport, Driving License, Aadhar Card
• Income proof may be required in some cases

Frequently Asked Questions about Andhra Bank Gold Loan

Here are the gold loan Andhra Bank FAQs:

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  1. What is the Quantum of Finance?

  You can borrow between Rs. 10,000 and Rs. 2 crores (Andhra Bank) and up to Rs. 25 lakhs as per the norms of Union Bank of India. The amount depends on the gold purity and weight, and other factors, including your need for finance.

  2. Who Cannot Take a Gold Loan?

  The bank does not provide the jewel loan to pawnbrokers, jewellery shop owners, and jewellers.

  3. What is the Repayment Period for Agriculture and Demand Gold Loan?

  The tenure is decided based on the marketing period of the crops or anticipated harvesting time. The period for demand loan is based on the income generation along with marketing and harvesting time. The tenure, in this case, is up to 18 months.

  4. What is the Tenure for Term Loan and Non-agriculture Loan?

  The repayment duration is fixed in line with the purpose of the term loan. The period of up to 3 years coinciding with the marketing/harvesting season, or generation of income from the production. The tenure for non-agricultural purposes is up to 12 months.

  5. Which Additional Documents Are Required?

  Apart from KYC documents, for the agri-gold loan the borrower has to provide a letter of continuity, gold loan pledge form, appropriate DPN Note, hypothecation of assets/crop, undertaking from guarantor/borrower for disclosure to CIBIL, letter of general lien, and setoff.