Gold Loan: Eligibility, Interest Rate and Features Explained

Many times a situation arises where you’re in a sudden need of funds and quickly need to source money in order to take care of some expenses. These expenses can be anything from a medical bill to your child’s education fees or something else. When you need quick money, your options are very limited. You can look at borrowing funds from your friends or relatives or get a personal loan. 

But another option you have is a gold loan. If you have some gold stored away in a locker, you can put it to good use by getting a gold loan. You’ll need to take the gold to a lender who will evaluate the gold and give you a loan on it. The gold will remain with the lender for the duration of the loan tenure. Once you repay the loan, you can get your gold back.

Most families in India have at least some amount of gold stored either from their marriages or gold that is passed down for generations. There is a cultural value attached to gold in India, and hence gold loans are very common here.

Let us look at some details like eligibility, interest rates and other features of a gold loan.

Eligibility of Gold Loan

A gold loan is a simple and uncomplicated secured loan. The eligibility criteria for a gold loan is not very stringent. You only need to be between 18 to 70 years of age to avail a gold loan. That’s it. Do note that different lenders may have slightly different age brackets for gold loan eligibility. 

Gold Loan Interest Rates

The interest rate of a gold loan varies depending on the lender, the loan tenure, loan amount and the value of the gold you’re pledging. Only after evaluating all these factors will the final interest rate be calculated. However, if you’re looking for an approximate figure, then most lenders offer gold loans starting at 9% interest per annum. To calculate EMIs, loan amount and tenure, you can use a gold loan calculator online. 

Features of Gold Loan

Minimum Loan Amount

Commonly, the minimum loan amount for a gold loan can be around Rs.10,000. This makes a gold loan a good option if you need a smaller amount.

Maximum Loan Amount

A maximum loan amount of Rs. 1 crore can be availed using a gold loan. Of course, you would need to pledge gold with an equivalent value or somewhere near it.

Loan Tenure

Gold loans are short tenure loans. They’re highly beneficial if you need quick cash but also want to be done with repaying the loan as soon as possible. Tenures for gold loans can be between 3 months to a year.

Processing Fee

Gold loans usually attract a processing fee of 1% of the total loan amount. 

Collateral 

You would need to provide your gold as collateral for a gold loan.

Thus, a gold loan can be a saviour in crunch situations when you need fast funds. Sometimes in these situations, one looks outwards for a source of funds and overlooks the gold that is lying in their very home. So the next time you want a quick loan, think of getting an easy gold loan.

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Created on Sep 24th 2021 01:08. Viewed 312 times.

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