Know About Gold Loan Eligibility & The Important Documents Required for Availing It

Today, gold loan is looked upon as one of the fastest emerging trends to get an instant monetary fix. However, to avail an easy approval on a gold loan, it is crucial for you to check out your gold loan eligibility. It assists you in figuring out how much you require paying every month in EMI form to meet your gold loan. 

What are the fundamental eligibility criteria you must be well-versed with?

To qualify for the gold loan, you must fall under the below-stated criteria – 

Employment type – Either salaried or self-employed.

Age limit – To avail a gold loan, your age limit must be anywhere from 21 to 60 years of age.  

What are the parameters factored in by lenders to process your gold loan proceeds?

∙       Gross weight – Gold weight is measured by the gold scale. 

∙       Net weight – This is obtained by lowering the stone weight from gold. 

∙       Gold loan purity – This decides your eligibility for a gold loan. So, the better the purity of your gold, the higher your eligibility. 

You must hold the required KYC-linked documents as address and identity proof. 

Detailed procedure to assess your eligibility for a gold loan

Understand every gram rate as well as LTV

Before you avail a gold loan, it is crucial for you to evaluate the gold value per gram. Once you are aware of the present cost of the gold per gram, you can simply compute the LTV (loan to value) ratio. LTV refers to the highest loan proceeds provided to the applicant of a gold loan depending on the underlying gold value. The standard maximum LTV that you can take up on gold is 75 per cent. This is set by the RBI. It is prudent to look at a higher LTV and lower rate of interest to get a prudent deal on a gold loan. 

The process to compute the gold loan

Gold loan rate on every gram computation is done by simply multiplying the net weight of gold with per gram rate in the market and the purity factor of gold. The weight is computed as the overall jewellery weight minus the other element of weight aside from gold i.e., the net weight computed on the diamond is the overall weight minus the diamond weight. The formula is - 

Gold loan proceeds = net weight X purity X per gram rate

Select the correct option for availing a gold loan 

The major thing to note is, the decision linked with availing a gold loan at the highest rate every gram is not just restricted to LTV offers nor is it based on how gold loan is computed. Ideally, to get the most beneficial gold loan deal, besides the LTV ratio, gold loan repayment tenure, rate of interest, pre-closure, or processing charges must even be factored in. 

A gold loan is one of the fastest and simplest ways to mitigate your instant financial requirements. Unlike other kinds of loan kinds, it requires minimal documentation. Owing to simplified documentation formalities, they are processed in reduced time. To get a gold loan, you are not required to provide any salary or income to the lender. If you are looking to apply for gold, you will require providing specific documents required for gold loan as below – 

Identity proof (anyone)

∙       Aadhaar card

∙       PAN card

Present address proof (anyone)

∙       Postpaid bill, water bill, landline bill or electricity bill

∙       Aadhaar card

∙       Address updated in bank passbook or bank statement

∙       Driving license

∙       Voter ID

∙       Passport

∙       Credit card statement

∙       Gas bond paper

∙       Rent Agreement

How can you place an application for a gold loan through the online route?

Opting for a gold loan is one of the prudent routes, whether it is for mitigating exigencies to support your ward’s education or other crucial personal reasons. You can simply apply for the online gold loan in the following steps listed below –

Important steps to place an application for a gold loan are as follows – 

Step no. 1

The first step is to review your eligibility parameters before you place an application for a gold loan. 

Age – Minimal age is 18 years and there’s no maximum age limit. 

Document – You must have valid KYC documents. These documents involve your identity proof and address proof. 

Step no. 2 

After you check out your gold loan eligibility, ensure to fill out the form, which involves the listed – 

∙       Full name as mentioned in the PAN card

∙       Mobile number

∙       Email address

∙       Present residence pin code

∙       The necessary loan proceeds

The rate of interest applicable on the gold loan proceeds is – 

Monthly repayment 

Loan proceeds

Interest rate

Between 20 K and 25 K

1.65 per cent per month

Between 25 K and 5 Lakh

1.33 per cent per month

5 Lakh and above

0.89 per cent per month

In the case, you are looking to pay both your principal and interest constituent after the loan matures, the rate of interest applicable in this case is 1.58 per cent. It is just a one-time repayment. 

Jewellery quantity (minimum of 10 grams) – Gold is valued at the market rate

Employment kind – Self-employed or salaried 

Step no. 3 

After you fill out the basic form, online document verification takes place. Post document verification, you get a call from your sales manager, who explains to you the entire gold loan procedure. 

Step no. 4 

If you mitigate the above eligibility parameters and the agreement on the terms as well as conditions, within forty-five minutes, the loan manager will approach you to authenticate your gold jewellery. 

Step no. 5 

After authentication of your documents and you have pledged your gold, your loan proceeds are directly disbursed to your bank account within some time by the manager of the loan. 

Ending note

Gold loans come across as a prudent deal if you are looking for instant cash at a low rate of interest. You can get a gold loan instantly by pledging your gold jewellery assets with minimal documentation on the online platform. So, in case you want to meet your instant financial needs, opt for a gold loan online.