Unused gold jewellery in coffers has no monetary significance to individuals unless they sell or keep those as collateral for getting loans. The latter one can be the best option to get instant money against gold. In fact, this way, they do not have to lose their precious ornaments. So, individuals must be aware of how they can take a loan against their jewellery from the lending institutions to meet liquidity requirements.
Ways to secure the gold loan against jewellery
Individuals need to follow a proper application procedure to apply for loan against gold jewellery. This procedure includes loan application, documentation and gold appraisal, as mentioned below.
Application process of gold loan
Before applying, individuals need to choose a favourable financial institution. They can compare several lenders according to several factors such as LTV ratio, interest rate, charges on prepayment. After this, they need to follow the steps as mentioned below to apply for a gold-backed loan online:
1: Visit the website of preferred lending institutions
2: search out the application form for a home loan
3: Fill the form with appropriate details as asked in the respective fields and recheck it for any probable mistake
4: Verify the mobile number with the OTP sent to your mobile number
5: Submit the form
Upon submitting, the respective lending institution gets the loan request. This application process is similar across India. So, individuals taking a gold loan in Nashik or any other part of the country must follow the steps mentioned above. Next, the lender contacts their borrowers to tell them about the following proceedings of the loan application.
Documentation and gold appraisal process
After completing the application process, the lender instructs individuals about the documents borrowers need to submit. Following are the documents individuals need to provide to their lenders:
- Voter id card
- PAN card
- Aadhaar card
- Electricity bill
- Driving license
Lending institutions validate the documents to check that the applicants meet all the eligibility requirements. If they fulfil the eligibility parameters, lenders ask them to submit their gold for appraising its value.
Gold appraising process
Lenders check the purity of the gold and its current market price. The purity of gold significantly influences the current gold loan interest rate. Most lenders do not accept gold below 18 carats as collateral. In fact, it is better to provide 22-carat gold for getting the credit advance at a significantly lower interest rate.
Furthermore, individuals need to keep in mind that they will not get the total market price of their mortgaged property as credit advance. Generally, the average LTV ratio for gold loans is nearly 75%. This means that for the gold valuing Rs.1 lakh, borrowers are eligible to get a maximum of Rs.75 thousand. However, this rate varies from one to another lending institution. So, individuals need to compare this ratio before selecting a lender. This way, they can get a maximum loan against the same amount of gold.
After completing all these three processes, the lenders inform borrowers about the applicable interest rate and the highest loan amount against the jewellery. After that, the lender sanctions and disburses the money against gold to borrowers’ bank accounts.
Now that individuals know how to get a gold lgold loan in Nashikoan against their jewellery, they should also know its benefits.
Advantages of gold loan
Following are some of the benefits of this type of mortgaged loan:
Lower interest rate
Gold loan is comparatively less risky for the lending institution as it is a secured credit advance. So, they offer this loan at a low-interest rate, which comes between 7-12% in India.
The criteria for being eligible for a gold loan are lenient, so lenders ask for minimum documents. In fact, submitting income proof is also not mandatory in this credit advance.
No requirement of CIBIL score
In the rest of the loans, individuals need to meet the minimum CIBIL score of 750 to borrow money without a hassle. However, in a gold loan, this credit score is not necessary. So, every individual can apply for this credit advance only by submitting their gold.
In conclusion, individuals can use their preserved gold to get a substantial loan amount by undergoing all the ways mentioned above. This way, through money against gold, they can easily meet their immediate financial crisis.