An Insight Into Gold Loan Scheme
Introduction
In the current state of the economy, many people are on the lookout for a solution to their financial crises.
The gold loan scheme has been facilitating all the Indian citizens struggling with their financial crisis.
A gold loan scheme is a scheme that allows raising cash against your gold. This scheme is available all over India and is offered by NBFCs and banks.
What Type of Gold Can You Pledge?
Gold ornaments are accepted as collateral for taking a gold loan. Usually, lenders do not accept gold bars, bullions, and coins.
Moreover, lenders will also evaluate the purity of your gold before they give you a loan.
Your gold jewellery’s purity must be between 18-24 karats to get a gold loan with Muthoot FinCorp.
How is Gold Secured?
The gold jewellery provided by the borrower is kept in secured vaults by the lenders and is given back to them once they repay the loan.
Thus, you can have peace of mind as your gold is safe from theft.
Who is Eligible for a Gold Loan Scheme?
The eligibility criteria of the gold loan scheme are easy to meet, as the main requirement for the lender is your gold.
However, different lenders will have different requirements.
Usually, any individual between 21 to 65 can pledge their gold and get a gold loan.
What are the Documents Required?
The documents required in a gold loan scheme are minimal, making its process very smooth and hassle-free.
Borrowers are only required to submit identity and address proof, and no credit score or income proof is required.
With Muthoot FinCorp, documentation requirements are minimal; to know more.
What are the Interest Rate and Other Charges?
A gold loan scheme is a type of secured loan, i.e., it is secured by gold. Thus, the interest rate charged on a gold loan scheme is lower than other loans.
Similarly, the processing fee for gold loans is also minimal, as it has less documentation requirement.
Many lenders do not levy any foreclosure charges from the borrowers after completing some months.
With Muthoot FinCorp, you can avail of a gold loan at attractive interest rates starting from 6.90% p.a, with minimal processing fees of Rs. 20 to 0.25% of the loan amount and no foreclosure charges after three months.
What if the Borrower Fails to Repay the Loan?
If you cannot repay the loan, the lender may seize your gold and auction it off to recover the outstanding balance.
If a customer is late in repaying the loan, they may incur additional fees. Reminders are sent after the first missed payment, but if the customer continues to be delinquent in their payments, their pledged gold could be seized by the lender.
Conclusion
If you are planning to get a gold loan, it is essential to make the right decision. This can be tricky because there is a lot to consider before taking a gold loan.
Thus, do your research and make sure that when you choose a gold loan scheme, you are choosing the right one for your needs.
