When you are in an urgent need for funds, one of the quickest and simplest ways to raise funds is through Gold Loan – also known as the Loan Against Gold. It is a secured type of loan where you pledge your gold as collateral to get the funds. This option is especially popular in India, where gold is not only a valuable asset but also holds cultural significance.
How Does a Gold Loan Work
The process of getting a Gold Loan is straightforward:
- Pledge your gold with a lender, an NBFC or bank.
- The lender evaluates your gold’s purity and weight to determine its market value.
- Based on its valuation, a certain percentage (usually 75%) is sanctioned as a loan.
- You receive the loan amount in your bank account.
- You repay the loan amount depending on the agreed terms
- Once the loan is repaid, your gold is returned.
Benefits of a Gold Loan
Here are some benefits of a Gold Loan:
- High Loan-to-Value Ratio: You can borrow a significant loan amount based on your gold’s current market value.
- Attractive Interest Rates: Being a secured loan, gold loans typically have competitive interest rates compared to unsecured loans.
- Minimal Documentation: The process requires basic KYC documents, making it quick and hassle-free.
- Flexible Repayment Options: You can choose repayment plans that suit your financial situation.
- Quick Approval: With online application and minimal documentation, the loan process becomes seamless and quick.
- Security of Gold: The pledged gold is stored securely and insured by the lender.
Let’s check the eligibility criteria and the documents required for getting a gold loan in the next section.
Also Read: 7 Benefits of Taking a Gold Loan
Gold Loan Eligibility Criteria
Gold Loan eligibility criteria may vary from lender to lender. Here are some common eligibility criteria that you must fulfil:
- Age: Between 21 and 65 years.
- Citizenship: Indian.
- Gold Purity: 18 to 22 Karat.
Document Required for a Gold Loan
You just need to submit basic KYC documents to avail of a Gold Loan. The minimal documentation makes the process simple and hassle-free.
Interest Rate and Charges for a Gold Loan
If you are looking for an attractive interest rate and minimal charges on Gold Loan, check out Poonawalla Fincorp’s interest rate and charges mentioned below:
|
Interest Rate |
Starting from 11% p.a. |
|
Loan Amount |
₹25,000 to ₹50,00,000 |
|
Loan Tenure |
12 Months |
|
Processing Charge |
Applicable as per scheme with maximum cap of 1% of loan amount |
|
Stamp Duty |
At actuals as per state laws applicable from time to time. |
|
Late payment Charges |
6% per annum on outstanding loan amount |
|
Notice Charges |
INR 200/- + applicable taxes per notice |
|
Foreclosure Charges |
within 30 days – up to 1% of loan amount + applicable taxes |
|
Part Release Charges |
INR 150/- + applicable taxes per transaction |
|
Auction Charges |
Rs.1500/- + applicable taxes |
|
Safe Custody Charges |
INR 5/-per gram of net weight per month, payable at the time of closure/foreclosure or renewal |
|
Hidden Charges |
Nil |
Also Read: How is a Gold Loan Amount Calculated?
Different Uses of a Gold Loan
A Gold loan can be used for the following purposes:
- Medical Emergencies: Get immediate funds for hospital bills, surgeries, or urgent treatments without delay.
- Business Needs: Manage working capital, invest in inventory, or handle cash flow gaps.
- Education Expenses: Cover tuition fees, admission costs, or overseas education without compromising your savings.
- Wedding or Family Functions: Finance large celebrations or rituals without any financial worries.
- Home Renovation or Repairs: Get your home upgrade, repaired, or furnish with the help of gold loan.
- Travel and Holidays: Plan vacations or family trips with quick funds, with the help of a Gold Loan.
- Debt Consolidation: Pay off high-interest debts like credit cards or personal loans using a low-interest gold loan.
Things to Keep in Mind
- The loan amount depends on the gold’s market value, which fluctuates
- If you fail to repay, the lender has the right to auction your gold to recover the dues.
- Always borrow from trusted lenders to ensure safety of your gold and fair value.
To Conclude
A Gold Loan offers a quick, convenient, and dependable way to secure funds. Whether you're organizing a major event, expanding your business, or renovating your home, a loan against gold provides a hassle-free financial solution. With minimal paperwork, quick approval, and flexible repayment options, it is a smart financial tool when used responsibly. However, as with any loan, it is important to borrow only what you can repay and to read terms and conditions carefully.
If you are looking for a trustable and reliable financial institution for availing of a Gold Loan, check out Poonawalla Fincorp to get the true value of your gold. So, what are you waiting for? Apply now!
Frequently Asked Questions
1. What is the interest rate for the Gold Loan?
The Gold Loan interest rate offered by Poonawalla Fincorp starts at 11%* per annum.
2. What is the minimum and maximum amount for a Gold Loan?
The loan amount offered is between ₹25,000 and ₹50,00,000.
3. Is there any loan amount usage restriction?
No, with Poonawalla Fincorp you can use the loan amount to meet your various needs such as medical emergencies, wedding, education, debt consolidation, etc.
4. What are the types of gold accepted for a Gold Loan?
When applying for a gold loan, lenders typically accept gold jewelry or ornament. The purity of gold must be between 18 to 22 Karat.