Gold has been a preferred asset to invest in for a long time among Indians. Irrespective of their financial stature, most households depend on gold during an emergency. Moreover, the high value of gold items makes it an apt asset to monetize on.
This popularity of gold has again boosted the gold loan segment, wherein individuals can avail substantial credits against minimum eligibility.
Since this secured credit form extends instant advances against easy-to-meet terms, it can be accessed without hassle. Nonetheless, borrowers should keep the gold loan documents required handy to streamline the entire process.
Gold loan, being secured in nature, requires minimal documentation. The applicants need to submit basic documentation to prove their identity and repayment capability.
Some of the common documents individuals need to submit include:
Individuals may need to submit additional documents as mentioned by the chosen lending institution. Typically, submitting the right documents makes the application and approval process quicker.
Similar to most credit forms, fulfilling both documentation and eligibility is essential to make an application.
Gold loan eligibility is simple to fulfill. Some of the requirements include:
The absence of CIBIL score requirement makes it a convenient credit form for individuals without a stable employment profile. Apart from maintaining transparency in gold loan documents and other requirements, individuals should focus on the application process.
Individuals can visit the official branch or call a lending institution to know the details of the application. An authority usually contacts an applicant for documentation and gold evaluation process. After successful scrutiny, the loan amount is disbursed to a borrower’s account.
However, with digitalization, most lending institutions now offer a digital application process. The steps involved for this include:
Step 1: Visit a preferred lending institution’s website.
Step 2: From the product tab, select the ‘gold loan’ option.
Step 3: Fill the form with relevant personal and professional details.
Step 4: A representative will contact an applicant for the subsequent process.
For successful borrowing, applicants need to have a clear idea about certain factors related to credit form.
Evaluating credit availability is the primary step of every borrowing. Typically, lenders assess an applicant’s credibility and other factors and levy the gold loan interest rate accordingly. Nonetheless, for gold loans, factors like LTV or Loan to Value play a significant role.
As per recent RBI guidelines, lenders can now offer up to 90% LTV against gold's present value. Applicants must be aware that this factor is subject to a lender’s policy and gold valuation. Lending institutions assess the collateral’s purity and weight to decide the loan amount.
Since the gold loan is secured in nature or backed up by collateral, interest levied is affordable. This is possible as lenders remain risk-free about the repayment. Individuals can easily reduce their overall borrowing cost with such a feature.
Moreover, the lending institution ensures the security of the pledged gold by storing it in premium vaults and extending insurance against the same. This is a customised feature that can vary from one lender to another.
A gold loan comes with flexible repayment terms, aiding borrowers in better fund management. They can choose the compatible repayment option based on their financial capability.
These discussed points substantiate the benefits of availing of a gold loan during an emergency. However, borrowers must never compromise with quality service and benefits. In this regard, comparing lenders and their gold loan document requirements would help undertake the right decision.
