Before we dive right into the steps of getting a Gold loan, let's take a look into what makes you eligible for a Gold loan if not income criteria.
Gold Loan Eligibility
An individual of 18 years old, some banks have the limit of 21 years.
Must have Gold ornaments or coins between 18karats to 24 karats.
Must have an identity proof such as an Aadhaar card, PAN card etc.
Must have an address proof such as Aadhar card, driving licence etc.
You can be a homemaker, salaried employee or self business owner
How can I apply for a Gold Loan?
For applying for a Gold Loan, you can either go to the company's website or walk into the nearest branch.
For applying offline
This is till date the most preferred and exercised way except in the COVID era when there was no other alternative than online.
Under mentioned is the step-by-step procedure on what you exactly need to do to apply for a gold loan offline.
Step 1 : Visit the Bank.
Step 2 : you would be enquired to know if you pass the eligibility factors and gold loan requirements.
Step 3 : The relationship manager will inform you if you are eligible for a loan, as well as various gold loan plans, gold loan procedures, and required documents.
Step 4 : If you are eligible and eager to obtain a loan, and you have brought the loan you will be asked to deposit it for verification along with identity proof and address proof.
Step 5 : By checking your documents and checking the quality of the gold, it will be decided whether to approve or reject your loan. You will receive a sanction letter, which includes important terms and conditions of the loan, including interest rates, handling fees (if any), and terms.
Step6 : Finally, the bank will store the Gold in their most secure vaults and on approval the amount would be disbursed to you in 30 minutes or at most it would take an hour.
How to apply for Gold Loan online.
This option is very convenient and straightforward. Many websites offer free consultation of loan product of which company would be the best according your needs.
Step 1 : Visit the bank’s website and fill in all the details as necessary.
Step 2 : After completing the form, the relationship manager will contact you to verify the eligibility factors and gold loan requirements.
Step 3 : The client relationship manager will inform you if you are eligible for a loan, as well as various gold loan plans, gold loan procedures, and required documents.
Step 4 : If you are eligible and eager to obtain a loan, the relationship manager will schedule/fixed an appointment for you to meet with the bank for a branch visit.
Many banks and financial institutions now also offer doorstep service. In this, you won't need to go to the bank, instead their employees would come to your home and conduct all the procedures you otherwise would need to visit the bank for!
Step 5 : You'd be asked to bring your documents ( identity proof and address proof ) and Gold to the bank.
By checking your documents and checking the quality of the gold, it will be decided whether to approve or reject your loan. You will receive an acceptance letter, which would include basic but very important terms and conditions related to the loan, including interest rates, processing fees (if any), duration if loan, maturity date.
Read them carefully and not hastily. Do not think even once to ask if you don't properly or fully understand any of the terms.
Step6: Finally, the bank will store the Gold in their most secure vaults and on approval the amount would be disbursed to you in 30 minutes. Mostly the procedure winds up within an hour.
Precautions to take as a beginner.
Creditworthiness : It is very important to check the security arrangements made by the lender to ensure the safety of your gold. Therefore, choose a company that is trustworthy and can guarantee the safety of your gold.
Interest rate : gold loan interest rate are the lowest among all other credit products. Your interest rate varies from lender to lender.
Repayment structure : The payment method is another very important component, and you can consider some alternatives. Muthoot Gold loan payments, SBI gold loan payments etc. Are quite flexible.
LTV ratio : Loan to value is the percentage of the value of the gold that you obtain as a loan of gold. Banks have lower LTV ratios, while NBFCs have higher LTV ratios.
Gold Loan term : Gold loans are short-term loans. Most institutions provide gold loans with a maturity of 12 months,24 months or 36 months.
Gold loan is the simplest loan and has a ton of benefits associated with it, however, precautions should be taken before applying for it.