How to use your gold jewellery for instant loan?
August 29, 2019
Your gold jewellery is not just a priced possession and investment, but also a smart way to borrow money. Read this post to know how you can use your gold jewellery for an instant loan.
Indians have a sweet spot for gold. In fact, India is one of the largest gold importers of the world. There is this certain sense of financial security that you gain when you own gold jewellery. At times of financial emergencies, you know that you can sell your gold jewellery if required to meet the obligations. But why sell your gold when you can take a loan against it? Check out how you can use your gold jewellery for borrowing an instant loan.
What is Gold Loan?
As the name suggests, Gold Loan allows you to borrow money by pledging your gold ornaments. In other words, you will keep your gold ornaments with the lender and the lender will let you borrow a loan against it. You can repay the loan amount within the tenure and take your gold back from the lender. However, you are not allowed to borrow loan of the entire value of the gold you pledge. Lenders generally give loans of only a fixed percentage of the cost of the pledged gold. However, if you are in a financial emergency or want to take advantage of an investment opportunity, a loan against gold makes much sense.
How much can you borrow?
Loan against gold ornaments is a short-term loan with a tenure of up to a year. Lenders offer Gold Loan per gram to provide enhanced convenience to the borrowers. They have their own minimum and maximum borrowing limits for the same. Most of the lenders generally offer gold loans of Rs <Amount> to Rs <Amount> for up to <X> months.
The interest on loan against gold is mostly in the range of <Number>% to <Number>% per annum. However, it can be higher depending on the lender you select.
Eligibility for Gold Loan
Unlike other types of loans, a loan against gold has minimum eligibility requirements. You only need to be 18 years or above in age and should be the legal owner of the ornaments. The banks are not required to consider factors such as your income, age, credit score, etc. with these loans as you are keeping your jewellery as a security against the loan amount.
In case a borrower is unable to repay the loan, the lender will have the right to auction off the gold jewellery to recover their money.
How to apply for a Gold Loan?
As instant loan against gold is a secured type of credit, the application and approvals are quick. In fact, you can apply for the loan and get the amount disbursed within a single day. For this, you'll be required to visit the nearest branch of your selected lender. The lender will value your gold for calculating the maximum amount you can borrow. You will have to fill up a loan application form and submit documents such as ID proof and address proof to get the loan. The lender will instantly approve the loan and disburse the loan amount.
What type of gold jewellery can be pledged?
Most lenders only accept gold jewellery with purity ranging between 18 and 24 carat. Some of the lenders also accept gold coins of 24 carats with a purity of 99.99%. However, as per the Reserve Bank of India (RBI) policy, the gold coin weight cannot be more than <X> grams.
Taking an instant Loan Against Gold Jewellery
There are several events in life when you need quick access to funds that you might not readily have. However, if you do have gold jewellery, an instant gold loan can be an excellent option.
With attractive Gold Loan interest rates, instant approval, and minimal documentation, loan against gold is one of the quickest ways to access additional funds to meet your emergencies.
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