The value of gold in India has gone high and every family wants to have some gold. The demand has come in the realization of gold loans. This a scheme started by banks in India where they are offering money in exchange for gold. The gold will be refunded once the individual pays the gold loan.
This has come in handy for the citizen who may need instant cash and don’t have to sell their gold permanently. The loans vary according to the quality and quantity of the gold. This can be gold ornaments, coins and other gold equipment’s. Banks have made the loan processing simple and paperless. The bank will only require proof of gold ownership and with this you will receive loan which worth the gold presented.
What are the advantages of gold loan?
This is one of unique loans which covers all citizens regardless of the state and where they bank. Here we have few advantages which come with the gold loans.
- Have no limitation and can reach all people
The loan is flexible and available to all citizens as long they have gold. Employed and non-employed citizens can apply for the loans and present their gold.
- No Documentation
Banks are not following up on paperwork, they require you to present gold and show proof of ownership. The loan corresponds with the gold presented and the value.
- Low interest
The bank offers the loan at relatively low rates thus suiting clients in their repayment. Clients can pay up and apply for new loan. The rate ranges from 12% to 16 %. Talking of interest on the gold loan we have a table below to show some of the rates as they appear for each bank. We shall check rates for 5 top banks and compare each according to the amount.
|Gold loan provider||Interest rate||Processing fee.|
|HDFC gold loan||9.6% onwards||0 to 0.5 of the loan given.|
|Muthoot gold loan||12% onward||0.25% to 1% of the loan given|
|ICIC bank gold loan||10.5% to 16.5%||1% of the loan|
|Axis bank gold loan||14.50% to17%||1% of the loan|
|SBI gold loan||11.5% to 17%||1% of the loan given|
Checking on the above table we can clearly some of the banks are relatively low on their interest rate. This will help the clients make a decision on which bank they would pick loans and be flexible in their payment. Banks offering the loan always give 75-80% of the gold value, they check the type and quality and with this they determine what to offer.
On the table HDFC happens to be the lowest of the banks. It is a popular bank in India with a lot of service to offer. The processing fee also varies from different banks where some are low but based on the loan given to the client. The loan has great time of payment as some banks base the payment period from 12-60 months from the day of loan.