In India, pledging gold to obtain a gold loan has become commonplace. People pledge their gold jewelry to NBFCs or banks to receive monies quickly. Nowadays, getting a loan against gold is painless and straightforward. It is possible to apply for it online by following a few simple procedures. However, full awareness is required before entering into a financial agreement, like with any loan. So, in this article, we’ll dissect the nitty-gritty of the gold loan so that you can make an informed decision while looking for one.The majority of lenders give loans of up to 75%-775% of the market value of the pledged gold. LTV ratio.
Who is eligible for a gold loan?
- Employment nature: Working as a Salaried, Self-Employed Professional, Businessman, Farmer, or Trader, for example.
- Age limit: To qualify for a gold loan, you must be between 21 and 60.
What kind of gold do you need to put down as a deposit?
The gold loan firms or financial institutions will only accept jewelry-grade gold. Coins/Bars/biscuits/utensils or any other kind of gold are not taken. Also, keep in mind that the higher the purity of gold, the higher the value and loan amount. The gold purity should be between 18 and 22 karats or higher. If the jewelry you are pledging contains jewels or stones, it won’t be accepted.
The term of a gold loan is six months, and it can be renewed without a fee for another six months. Because gold loans have such a short term, you must be sure that you will be able to repay the loan on time. If you do not refund your pledged gold within the specified time, you risk losing it.
What is the best way to repay a gold loan?
Borrowers with gold loans have a variety of repayment alternatives. The loan amount can be repaid in four different ways. These are listed below:
- Regular EMIs: This option allows borrowers to pay off their loans in manageable monthly installments, including interest and principal.Borrowers can return the interest and the principal amount in this option, depending on their convenience and affordability. This strategy will enable them to save significant money in interest.
- Only interest EMI: With this strategy, borrowers can choose to pay only interest during the loan term and pay off the entire principal amount when the loan expires at the end of the term.
- Bullet repayment: Under this repayment arrangement, borrowers must repay the entire loan amount, including the interest and principal, after the loan term.
What is a gold loan calculator?
Individuals or applicants can use the Gold Loan EMI Calculator to determine how much interest they would pay on a gold loan they wish to take out against their gold or gold jewelry. It is essential to know about the gold loan calculator. You can calculate the gold loan interest by deducting the principal loan amount from the total outstanding. You can also use a gold loan interest rate calculator to learn more about the subject and see how the interest rate affects your EMIs and total outstanding balance.