It is a tradition in India where people buy gold on every auspicious occasion. Most of the time, this yellow metal is invested in during the wedding season or festive periods. Gold has the sentiment of the people attached to it, and this bright yellow metal has allured many towards it and has become a center of attraction. With such a vast market, the value of gold is also continually increasing and, most of the time, higher than other metals. Gold is also used as a means to the end during a financial crisis faced by an individual or entity.After the internal or personal resources have been exhausted, a lack of financial back-up can be back-breaking. The financial organizations have gold loans readily available for the borrowing individual or entity. During any such situation, pawning a gold object as collateral at the bank or non-banking financial company can help the individual or entity to maintain liquidity.
The borrowing individual or entity applying for a credit against the yellow metal prefers this facility because they want to get the swift monetary assistance to employ for personal reasons, meet business requirements, or any other reasons the borrower is not required to disclose the same to the lending organization (banks and non-banking financial companies). It is one of the quickest and effortless methods to fulfill urgent financial needs. The loan against gold is the most effective way and exercised regularly by the borrowers compared to other credit forms.The documents required for availing of this advance are the necessary KYC documents (for instance, passport or Adhar card as identity proof). Along with that, a properly signed application form to initiate the request for the advance facility. For the paperwork and documentation process, only the point stated before must be kept in mind by the borrowing individual or entity.
The borrowing individuals and entities can undoubtedly apply for a gold loan through the online portal as well. The lending institution will send the agent at the borrower's doorsteps to set the process of amount disbursement in motion by evaluating and concluding the amount.Besides the minimum paperwork and documentation, the cost attached to this credit facility is substantially low. Pandyan Grama bank gold loan policy has workable terms and conditions for borrowers.
As per the collateral evaluation, the loan amount will be sanctioned based on a loan-to-value (LTV) ratio ranging from 70% to 80% of the actual worth or the fair market value of gold. The gold loan per gram rate will be used to calulcate the value of collateral and then the ratio will determine the loan amount. The regular costs associated with the processing of the application and disbursing the credit facility will be deducted. The associated costs are the processing fees, which vary between different loan providers. The additional related charges, such as the processing fee and the late payment fee, are discretionary.The points discussed above are how these credit facilities operate and how they get funds under a gold loan.
