Gold loans have been the companion in need for some during financial crises. Individuals can utilize the gold adornments, coins, or bars at homes or banks and get cash easily with no problems. Some financial institutions like banks and NBFCs have the best gold loan schemes at affordable interest rates.
Let us learn all the crucial aspects of availing loan on gold:
Application Process to Avail of a Gold Loan
Most financial institutions offering gold loans have a very straightforward application process. Borrowers can either avail of a loan against gold from the comfort of their homes or by visiting the lender. Borrowers need to bring the gold to be collated along with their identity and address proofs.
Documents Needed for a Gold Credit Are:
- Identity Proof – Aadhaar card, voter ID card, PAN card, driving license/permit, or ration card to verify individual identity.
- Address Proof – Electricity charge statement, phone charge statement, tenant contract, ration card, bank passbook, or property papers could be utilized to verify the address.
The procedure for a gold loan is:
- Visit a reputable NBFC or any other financial institution.
- Take the application form and fill in all the details asked.
- Submit the application form alongside a copy of KYC verification documents like identity and address proof.
- The lender will examine the documents and assess the worth of the gold. They will affirm the cash that can be approved for the gold you are vowing.
- Based on the agreement between you and the lender, they will fulfil other formalities like concluding the gold credit term and passing the cash to your account.
Common Mistakes Made at The Time of Applying For Loan on Gold
Individuals do commit some usual mistakes while applying for loan against gold. They may not even understand the mistake until it’s too late and now the time of paying back is around the corner. Thus, they end up paying the over-the-top sums as interest. This then deters them and others from availing of the loan against gold schemes in the future.
Let us some of the common slip-ups done by people while applying for loans against gold:
Purity Level of The Gold Asset
Gold purity is one of the main factors that influence the gold loan rate today. This point should be taken into consideration while buying gold assets too. Individuals buy gold ornaments studded with diamonds and valuable stones.
However, remember that only the weight of gold will be used and not the stones and other metals embedded in it. This means the total weightage of stones would be deducted no matter how valuable those possibilities are. So, consider this factor while you take gold assets to get a good gold loan rate today.
Dependability of the NBFC/Bank/Vendor
The best loan against the gold plan is when you get fair loan value against your gold asset. Hence, before contacting any lender for gold loans, ensure that the provider is reliable. Unfair lenders will not give you the loan amount against the real value of your assets.
Thus, you should ensure that the firm is reliable, and they should be completely straightforward in their proceedings.
They ought not to involve in acts of fraud like selling your gold without your agreement or supplant it with bad quality gold.
The Loan to Value (LTV) proportion would be distinctive at various finance firms. You must check out the LTV while you are applying for the best gold loan. Many lenders offer higher LTV, which guarantees that the borrower is getting a high incentive for their gold resource. However, it will also depend upon the plan chosen.
Comparing Different Financers
The simplicity of acquiring a good gold rate today, LTV proportion, reimbursement choices, and many other criteria will only rely upon the loan provider. One should carry a comparison between the NBFCs or banks offering gold credits ahead of time. Apply for the loan on gold to the right agent lender. It would make the loan procedure advantageous as well as would help in a tranquil reimbursement.
Getting the best gold loan can instantly solve your financial issues. Keep all the points mentioned above in mind while opting for loan against gold in the future.
Those looking for loan against gold at competitive interest rates with a simple application process must check out the Bajaj Finserv Gold Loan. You can get a loan of up to Rs. 1 crore by pledging your gold assets. The loan application process is simple. You can apply for a loan on gold online or visit the nearest Bajaj Finserv branch.