You can avail a loan from a bank or an NBFC by pledging your gold. You can pledge your gold coins or gold jewelry and avail a gold loan from a bank. The gold has to be of purity 18-24 carats.
You can pledge only gold jewelry to avail a gold loan from an NBFC.
In India tradition demands that gold be collected and accumulated in the family. This means you can easily avail a gold loan with this family gold. You get an LTV (Loan to value) ratio of 75%.You get INR 75 for every INR 100 you pledge.
Gold and gold jewelry as collateral, mean lower Interest rates compared to a personal loan. Processing time is very quick.
Banks do not check for income and salary proof. Unemployed persons can also avail a gold loan. Banks do not check credit history.
You get up to 75% of the value of the gold or gold jewelry, pledged for the loan. Speedy sanctioning of loans.
You pay only the interest on the loan amount borrowed. Principal repaid at the end of the tenure.
If you reside in a rural area you can easily avail a gold loan from an NBFC (Non Banking Financial Company).
The documentation is much faster if you avail a gold loan from an NBFC rather than a gold loan from a bank.
Remember: The NBFC charges you a higher rate of interest on the gold loan than a bank. The interest charged by the NBFC could be around 22-24%.
Another benefit you get from availing a gold loan from an NBFC, is you have to only pay the interest amounts regularly on the gold loan.
You pay the principal (Borrowed amount) back, at the end of the term (tenure of the gold loan) and reclaim your pledged gold jewelry.
There are no processing charges and pre payment penalty, if you avail a gold loan from an NBFC.
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