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Nowadays, we are here to give you a slight bit of additional information, thinking it might add some more knowledge regarding gold loans. Let’s see, and learn some more about gold loans.

To start with, a gold loan is something in which an individual offers his or her gold assets to the lending institutions which are banks, non-banking financial companies, or private lenders in need of a loan, to stabilize his or her financial needs or his or her aspects in life. Whereas we all know the simplicity and not much of a complicated procedure being involved in this whole process and therefore gold loans especially have been more in demand and eventually the growth of the economy is also increasing at the same time due to the high demand of gold prices in the market. 

When we mentioned the simplicity and no complications, it includes the quicker and short span of processing time, general and basic proofs to be submitted and in which they do not require or make an individual include his or her income proofs along with the others. The added advantage compared to other loans comes into the picture, when we talk about the interest rates taken into consideration that is, gold loans are being offered to the borrowers and customers at very low-interest rates, and the newly being talked about long term gold loans are doing rounds with the added benefits of customers and borrowers being able to enjoy the low-interest rates alongside with the longer time duration of the tenure periods they are offering them with.

Now, when we talk about all the above factors concerning the rates of interest and time duration, the gold loan interest rate varies among different types of lending institutions which comprise both the banks and non-banking financial companies, and let’s take a look at the variations among these. 

When we look at a few of the parameters of the city union bank gold, firstly the city union bank gold loan interest rate is considered to be the main criteria here, starts at 7 % onwards, which is considered to be moderate for the customers. The city union bank gold loan rate is offered regularly from ₹ 5,121 especially in both the urban places as well as the rural areas which is a plus point for many of the users. 

But one thing which is kind of a disappointment to the borrower is the processing fee, which includes things like valuation charge, stamp duty, and other applicable charges. However, the processing charge here would not make much of a difference as it consumes only 1 % of the net amount based on the gold loan that is offered. Every banking company offers the loan amount on the minimum and maximum basis, and when we talk about the minimum amount which is offered by the city union bank is around 90 % that is based on the LVT. Whereas the maximum loan amount is up to ₹ 1 crore which also includes the mandatory proof of the income of the user.

When we talk about the non-banking financial institutions these kinds of non-banking sectors generally have a bit of high gold loan interest rate and some of them in particular offer rates from 11% onwards. And even the processing fee is up to ₹ 500 for the users. Coming to the loan amount these NBFCs offer a minimum of ₹ 1,500 and a maximum of ₹ 1 crore for the users and customers.

Conclusion: The gold loans prepayment penalty is just nil or might be up to 1% when in comparison to certain other loans, as some loans against property, the prepayment penalty is up to 2%, which might be the added benefit for the customers and borrowers.

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