“If women could go to banks and get a business loan by using gold ornaments, whole face of world would change.”

What iS Gold Loan?

Gold loan is a loan, where a loan is taken against gold ornaments without having to sell them. Gold ornaments lying ideal can be put to productive use by availing loan against them. Banks and NBFC provide gold loans. The tenure of the gold loan is generally a year but can go up to 3 years. During this period, borrower supposed to pay interest regularly.

Documents required For Gold Loan

1. Identity proof such as passport, voters ID or driving license.
2. Address proof such as electricity bill, ration card, telephone bill etc.
3. For signature proof you need to submit your passport copy, driving license or any other document with your sign.
4. 2 passport size photographs.

Some of the leading companies and banks offering gold are ICICI Bank, Muthoot Finance, Manappuram Gold Loan, SBI, and HDFC.

Gold Loan Eligibility

Applications for gold loan are accepted from:

1. Farmers, traders, salaried, self-employed professionals and businessmen
2. Between, minimum 21 years to a maximum of 70 years of age – Self-employed professionals/non-professionals.

Benefits of taking gold loan

1. The gold loan doesn’t demand any certificate to show your salary or income and even no credit card history is required. Thus even unemployed and nonworking people can go for a gold loan.
2. Unlike any other unsecured loan, a gold loan doesn’t require many papers, only a few documents such as ID proof and address proof is enough to avail for such loan.
3. One of the main advantages of gold loan is its low-interest rates. Usually, loan over gold is provided at the interest of 12-16% per annum and this is quite low compared to personal loans available at interest rates of 15-26% per annum.
4. In rural areas Agricultural loan against gold is also available for agriculturist at a very nominal rate of Interest of 7%-8%, proof of agricultural document needs to be provided.
5. Gold loan is the most simple and convenient forms of loan because here all you need to do is pledge your gold with a bank or finance company and get up to 80% of the market value of the gold as a loan.
6. The borrower will be given an option to pay only interest during the entire term and at the end of the tenure, you can pay a complete borrowed amount in a single shot.
7. In case of gold loan processing time is very less. Usually, banks take just a few hours to complete the process whereas in case of NBFC’s (Non-Banking Financial Companies) a few minutes is enough for the same. So for immediate financial help, this is the best option.