What are the Documents Required for Gold Loan
A loan secured by gold is a quick and convenient approach to acquire the funds you require right immediately. When compared to other available loan choices, this one requires an extremely minimal amount of paperwork and almost no gold loan documents at all. They can be processed more quickly since there is less bureaucratic red tape to navigate. When you acquire a loan against gold, you won’t need to provide any evidence of your employment or income.
But first, let us know what a gold loan is, in depth.
What is a gold loan?
Gold loans are a type of collateral loan in which the borrower pledges tangible assets made from gold to the lender. You can quickly and easily acquire the funds you need for whatever purpose you may have. The value of a loan secured by gold jewelry or ornaments is determined by a number of factors, including the item’s purity and the current market price of gold.
A gold loan is a viable option when a borrower has an immediate need for funds but cannot wait for the typical credit approval process to complete. Using the gold object as collateral for a loan makes it possible for borrowers with less-than-perfect credit to obtain a loan with minimal hassle. And borrowers can also know the amount of money they are getting against their gold by using an online gold loan calculator. It’s that simple!
What are the documents required for a gold loan?
For the proof of identity:
- Aadhaar Card
- Valid Passport
- Job card issued by NREGA
- PAN Card
- Valid Driving License
- Voter ID Card
For the proof of address:
- Aadhaar Card
- Valid Driving License
- Voter ID CardValid Passport
- Ration Card
- Electricity Bill
- Job card issued by NREGA
Getting a gold loan might help you take care of your bills quickly and in the short term. The required gold loan documents are simple to gather. If you are concerned about your credit score, you have nothing to lose by applying for this loan. In times of financial stress, some people may turn to gold loans despite their low credit scores. The interest rate on gold loans is quite cheap in comparison to other loan types.
What is the eligibility to apply for a gold loan?
It’s possible to receive a gold loan if you own any gold. Any legal resident of India is eligible to apply for a gold loan, unlike more traditional forms of credit like personal loans. This includes salaried workers, business owners, stay-at-home moms, and even farmers. A high credit score is not required to obtain a gold loan. Therefore, if you have a bad credit score but a substantial amount of gold to pledge, you still have a possibility of obtaining cash.
What is the interest rate on gold loans?
When compared to other types of loans, such as a personal loan, the interest rate on a gold loan is much more reasonable because of the security offered by the gold. Gold loans have varying interest rates that are determined by a number of criteria, including the lender, the loan term, the loan amount, and the value of the gold being borrowed. It also matters from whom you borrow the gold, whether a bank or NBFC. Gold loan interest rates from banks are often lower than those from NBFCs. For this reason, you shouldn’t jump at the first gold loan offer you receive if you’re considering applying for one. You should get gold loan quotes from at least three different banks before making a final decision.
What is the gold loan tenure?
The amount of time that borrowers have to make prepayments on their gold loans differs from one lending organization to the next. In most cases, it falls somewhere between three and twelve months. In certain circumstances, some creditors will even grant you a longer repayment period or give you the option to renew the loan in order to make it last for an even longer period of time. It is imperative that you make prompt repayment of the gold loan amount; the term of the gold loan is significantly shorter in comparison to that of other types of loans. In the event that you default on gold, you risk losing all of your gold articles permanently.
Thus, a gold loan can be a good option if you need cash urgently and don’t mind paying a bit more in interest. Borrowers can get access to emergency funds in a short amount of time by using their gold jewelry as collateral for a gold loan by just submitting a minimal amount of paperwork or gold loan documents.