Taking a loan against gold jewellery is one of the easiest ways to get money instantly. By pledging your gold jewellery, you can get a gold loan as high as Rs. 2 crore at a lower rate of interest.
You can use this loan to manage all your needs without any restrictions. You can use the loan amount to plan a wedding, pay for your child's education, medical emergency or invest in a new business venture and more.
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Here are a few tips to keep in mind while applying for a loan against gold.
1. Value of your gold jewellery
While a gold loan is a convenient option for quick money, the loan amount you can avail depends on the purity level of your gold. Most lenders accept only 22-karat gold jewellery.
Reputed lenders like Bajaj Finserv have a transparent gold evaluation process. They use best-in-class karat metres to make sure you get maximum value in exchange for your gold jewellery. Depending on the lender and the Loan to Value (LTV) ratio, you can get a loan up to 75% of the value of your gold.
2. Rate of interest
The rate of interest of a gold loan is an important factor to consider because it determines the cost of borrowing money against your gold. Gold loan interest rates can vary depending on the lender and other factors such as the loan amount, and the loan tenure. The interest rate for a gold loan can start as low as 0.83% per month.
When it comes to interest rates, you can also use free gold loan EMI calculators from reputable lenders like Bajaj Finserv to see how your payments will work at the end of your loan's term. It is important to compare different lenders and their interest rates before choosing a gold loan to ensure that you are getting the best deal possible.
3. Lender’s market credibility
Since there are many banks and NBFCs that offer gold loans, it can be hard to find the right one. Before you apply for a gold loan, you should ensure that the lender is reputable and trustworthy. Since you are putting up your valuable jewellery as collateral, being vigilant towards the lender’s market reputation is a must.
4. Eligibility criteria and documentation
The eligibility parameters for a gold loan are pretty simple. You just need to be an Indian citizen between 21 years to 70 years of age and have all your basic KYC documents ready for verification. In most cases documents like Aadhaar card, voter ID card, the passport, or driver's licence, along with a proof of your address is enough to get your loan approved.
5. Repayment tenure
The repayment tenure and options vary from lender to lender. You can choose to pay the interest on a gold loan on a monthly, bi-monthly, quarterly, half-yearly, or annual basis. You could also choose to pay the total interest at the start of the loan and pay back the principal at the end of the tenure, as per your convenience. Additionally, if you choose a repayment plan with frequent instalments, you may be able to negotiate a lower interest rate.
If you are looking at a gold loan to manage your expenses, you may want to look at the one offered by Bajaj Finserv. With loan amounts ranging from Rs. 5,000 to Rs. 2 crore and a host of useful benefits such as part-release option, free insurance, and convenient repayment plans, you can get the best value for a loan against your gold jewellery. Visit the Bajaj Finserv website to learn more.
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