What is the Process of Applying for a Gold Loan?
Are you wondering how to apply for a gold loan? The process is simple.First, you should determine your financial needs and whether your gold jewellery can cover that. You will then need to identify a reputed banks that offersgold loans, since they will keep your pledged asset until the loan is repaid. It’s a good idea to compare interest rates, loan amount, other charges, and eligibility. You also need to determine how much EMI you will need to pay every month. This can be done by using a gold loan calculator. After finding out all this information, you can apply for a gold loan by submitting the documents required. But before you do all this, let’s understand how a gold loan can help and how you can apply for one.
What is a Gold Loan?
When you take a loan by keeping your gold jewellery as collateral with a bank, it is called a gold loan. This loan is secured as it is provided against an asset. The bank has the authority to sell the gold you have kept as collateral in case you fail to repay the loan amount within a stipulated time. Till then, the gold will be kept safely in the bank’s locker. On complete repayment of the loan, the bank will return your gold jewellery. Therefore, it is very important to select a highly reputed bank for a gold loan.
How to Choose the Bank for a Gold Loan?
Before applying for a gold loan, ensure that the bank offers the following facilities:
- The bank should follow a transparent process to evaluate the quality of the gold and determine its value.
- Once the loan is approved, the bank should disburse the loan amount within a few hours.
- It should have a simple documentation process.
- The bank should offer loan amounts up to Rs. 1 crore.
- You can choose a bank that allows to repay the complete amount at the end of the loan tenure.
- In case you wish to go the EMI route, the bank must provide a gold loan calculator on their website so that loan applicants can easily check the EMI amounts.
- Choose a bank that has a large number of branches across the country. This not only establishes credibility, but also makes it more convenient for you to carry your gold jewellery to a branch.
- The lender must have highly secured vaults and lockers to keep your gold jewelleries.
Check Your Eligibilityfora Gold Loan
Usually, the eligibility criteria for a gold loan are:
- You must be an Indian resident.
- You should be at least 21 years old.
- Applicantswhose age will be above 70 years on maturity of the loan may not be eligible.
- You need to be the owner of the gold jewellery.
Process of Applying for A gold loan
You can apply for a gold loan online. Else, you can visit the nearest branch of the bank and deposit your gold jewellery. The bank’s professionals will evaluate the quality of the gold and determine its value. Depending on the value, the loan amount is determined.
You will need to furnish the following documents to complete your application for a gold loan:
- Identity Proof (like Aadhaar Card, Voter ID, Driver’s License)
- Address Proof (like electricity bill or other utility bills)
- PAN Card or Form 60
- Cancelled Cheque (Blank)
- Your Photograph
Once the documents are submitted, within a few hours, you will receive the amount in your account, provided all documents are verified and the application gets approved.
The simple application process and easy loan processing has made gold loanspopular to finance a variety of needs, including business expansion, medical emergency or personal expenses (like a child’s higher education). However, such a loan for plot purchase.
Do make sure that you check a gold loan calculator to ensure you can make the EMI payments on time. Have all the documents in place to ensure there is no delay in loan disbursal.