Gold is an asset which has always helped individuals when they face money shortages. The prices of gold keep on fluctuating and most of the times increase exponentially, this is one of the biggest reasons why people prefer taking gold loans when in need of money.
People pledge their self-owned gold as a collateral to financial institutions in return of which they receive the equivalent amount of money which is called the Loan to Value or LTV. When you avail a loan by vowing your valuable gold as a collateral it is called a Gold Loan.
The interest rates on the gold loans are relatively lesser than that on other loans, in addition when you pledge your gold to a financial institution, they are bound to keep your gold safe.
If you are willing to avail a gold loan you must know the current prices of gold and the interest rates offered by different financial institutions as well. Gold loan interest rate is a matter of dynamic change. Market fluctuations can impact your EMI and interest rates heavily.
Any financial institution grants a loan to a certain individual for a certain specific period of time which is called the tenure of the loan. The loanee is thereby bound to repay the total amount of the loan granted to him within that specified tenure.
The failure to comply or repay the loan within the time would bring about certain consequences. But worry not, for you have kept your gold as the collateral, the financial institution would not care to bother you much and retrieve the remaining amount of the loan by selling off your gold.
Top Retirement and Pension Plans In IndiaOf course, you would lose your gold but for what it is worth, you would not have to witness any dire consequences of your failure to repay the loan.
There are different financial institutions like Banks and Non-Banking Financial Companies or the NBFCs which offer gold loans at different interest rates. The interest rate on gold loans varies from institution to institution.
Change in the process of granting a loan
Back in the olden times people used to take loans from unauthorised individuals who would charge hefty interest rates on the loan amounts and thence, the borrowers fell into debt traps.
Then, came banks, people started reaching out to the banks for loans. Gradually people understood that taking keeping your gold as a collateral is a way more profitable way to avail a loan than pledging any other asset as a collateral.
The problem with gold loans was that, in order to avail a gold loan, you would have to visit a certain bank, wait in a queue and then wait for verification of your gold, even after that you would have to wait a while longer in order to receive the Loan to Value.
Well worry no more, now that everything is getting digitised, the process of availing a gold loan has also been digitised now. NBFCs offer a more simplified and convenient method for the loan approval procedure.
You would have to register online on the website of a certain NBFC from which you would want to avail a gold loan. On successful registration you would be given a time slot of your choice and convenience to choose from and then the financial institution would send an executive from their nearest branch to your doorstep according to the time slot you have chosen.
Crucial Tips for Handling EndowmentsYou would then be asked by the executive to present your self-owned gold for verification. When the gold turns out to be pure and real you would then be eligible to avail the loan. You would be told about the amount which you can avail against your collateral, the amount is decided with reference to the real time prices of gold.
You would have to do some signatures here and there and then by the end of the procedure the Loan to Value amount would be credited directly into your bank account. Only then do the executives leave your doorstep. They then directly lock the gold in the vaults of their banking partners.
You are supposed to repay the loan in due time and an equated monthly installment or emi is further fixed which you are bound to pay the financial institutions on a monthly basis.
You can calculate the emi by yourself using a gold loan emi calculator available online. On successful repayment of the loan amount, the loan is disbursed and the gold returned to the owner.
Rupeek is one of the best known and certified NBFC which offer good value for your gold. They provide a 30 minutes hassle free and convenient procedure by the end of which you receive the loan amount directly in your bank account. There are various other benefits that Rupeek has to offer which distinguishes it from other NBFCs.
