Gold is an asset be it in any form, shape or size. It is usually available in gold bars, coins and ornaments. Against which one can apply for a loan. Initially only jewelers and some of the firms where lending loan against gold. However now RBI has certified some firms, has allowed banks and NBFCs to lend loans against gold. There are certain rules and regulation for the loan process. One of the easiest ways to convert your gold into money is through gold loan without losing your gold.
Gold is a safe form of investment, not like money as one would not easily prefer to monetize their gold or resell it. So, it’s a safe investment usually for uncertain situations. Uncertainty, financial difficulties are somethings that knock your door without any warning. One should tackle this strong headedly, which requires financial support and loan is one such best financial support.
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Let’s Know What Exactly gold loan is and how it Works?
A loan is basically a process wherein money is lend to individuals or organizations on a particular interest rate. Some loan process needs securities wherein very few loan process finishes out without securities.
A loan can be classified into two:
- Secured: Gold loan, property loan etc.
- Unsecured: Personal loans
Secured loans are safer and is comparatively cheap than an unsecured loan as we keep some collateral. So, the gold loan is a secured method of getting a loan. However, on a secured loan, one gets the amount sanctioned based on the collateral worth and only a certain percentage.
For Gold loan, the actual value depends on the market value of the gold. 22 carat is the standard set by the RBI. However, a loan on lower carat gold, but a minor reduction on the quality depending on the gold carat is done. This loan doesn’t require any income certificates or job profiles. The requirement here is your gold, basic identification card- aadhar card or pan card. The price consideration system also differs as some consider the gold market’s daily price, some weekly or monthly.
What is the Procedure for Getting a Gold Loan?
The procedure of getting a gold loan is as simple as visiting gold jewellery shops. Here you need to carry your gold, be it ornaments, bars or coins, to the bank or NBFCs. They will evaluate your gold based on its purity, weights and mixes. And based on this validation they will give you the maximum amount or the value of your loan. After all, this is done then you are the deciding factor whether you want to get the loan or don’t. If you wish to go further then, you need to fill in some form and provide them with your details with documents. Instantly the reimbursement process takes place. Gold loan is one of the easiest ways of getting a loan, and the rate of interest of the this is less than that of personal loans.