How to Take a Loan Using Gold Jewellery?

We all know that gold is the favourite precious metal in Indian households as it is not only a sign of good fortune but also a secure form of investment. Indians generally buy gold, as they see it as a readily liquidable fund that can be helpful in case of future emergencies. So, they have it in the form of jewellery or gold bonds.

Many financial service providers offer gold loans in India for different needs of borrowers. These days uniquely tailored schemes are available to cater to the needs of all kinds of borrowers. One of the unique benefits of taking a gold loan is that one does not need to specify the expense of the loan amount. One can use this financial aid for an urgent need of funds in cases of medical emergencies, marriage, abroad study, business emergencies, etc.

However, Before opting for a gold loan one must know the maximum loan amount they can get against gold jewellery. According to the Reserve Bank of India, different limits are set for different modes of repayment of gold loans. For example, if one opts for bullet repayment, they can get a loan of up to 2-4 lakhs from the lender. As per the repayment method, one can take a gold loan of a maximum of Rs. 2 Crore from any bank or non-banking financial company. Also, the minimum value of gold that is eligible for a loan is Rs. 5000. Also, before a person takes a gold loan they must check the current rate of gold in the market as the value of gold may fluctuate depending on the market situation.

How to apply for a gold loan?

If one wants to take a gold loan against their jewellery they can apply for it online. These days, one can even take benefit of the gold loan at home service where they can get their gold loan process initiated in the comfort of their homes. All they need to do is search for a reliable lender, go on their official website, and check the gold loan eligibility criteria and documents needed to apply for the loan. If they match the eligibility criteria they can simply book an appointment for the doorstep service of gold finance. Once the booking is done, professionals from the bank or NBFC will visit their house and check a few documents.

They will also verify the purity of gold using some tools. If one wants to review the interest rate they will need to pay while taking a gold loan, they can use a gold loan interest rate calculator available at the official website of the lender.

After a person gets a gold loan, they can repay the loan amount in different ways. Since gold finance is a secured loan, it allows the borrower to repay the gold loan amount at their convenience. Some of the methods of repayment include repayment through interest-only EMIs, partial principal repayment with flexible interest payment, bullet repayments, and monthly payments in EMI. The mode of repayment selected by the borrower can impact the rate of interest on a gold loan.

What is the eligibility criteria for taking a gold loan?

If one needs to take a gold loan they must first check whether they match the eligibility criteria required to take a gold loan. One can get a gold loan if they meet the basic criteria mentioned below:

• They must be an Indian citizen
• Their age must be between 21-70 years.
• The gold collateral must be in the form of jewellery but not in bar, utensil or any other form.
• The purity of gold must be 18-24 Karats. The composition of gold jewellery must have a high percentage of gold and a low percentage of other metals such as silver, copper, nickel, iron, zinc, tin, manganese, cadmium, and titanium.

What are the documents required for taking a gold loan?

To avail of a gold loan, one must have the following documents:

• KYC documents like PAN card, AADHAR card, driving license or passport.
• Address proof documents like sales deed, rent agreement, utility bills, voter ID card or driving license.
• Passport size pictures

To get a gold loan one does not need to show their CIBIL score or income proof. This is the reason why the gold loan is preferred by many borrowers more than any other type of loan.

Muthoot Finance is India’s most trusted financial services brand that offers several gold loan schemes such as the Muthoot Mudra Loan, Best Value Scheme, and Muthoot Highvalue Loan, among others. If one takes a loan from Muthoot Finance, they can avail of its benefits such as free insurance of gold, 7-layer security, minimal documentation, pre-part payment facility, pre-part release facility, and insta-personal loan.