Gold is not only used for crafting ornaments or as an asset class. But it is also used as collateral to avail loans. Gold loans are popular in India. This is evident from the fact that India’s gold loan market is expected to be worth more than Rs 4000 billion by 2022. The emergence of new-age financial firms is enabling further expansion of the gold loan market as they are able to tap hitherto unexplored markets.
What is a Gold Loan?
A Loan Against Gold, also known as Gold Loan, is a secured loan. You receive the loan from the lender in return for your gold ornaments such as jewellery, gold coins, gold bars, etc. Or you can apply online for a gold loan from financial institutions and financial institutions at several rates based on what you can afford.
Procedure
It is 2020 and with all the technological advancements and privileges in hand, you don’t have to go to the financial institution to get a gold loan. You can avail the loan easily sitting in your office or relaxing at home through the online gold loan website of the financial institution you are going to take the loan from, such as Muthoot Gold Loan Online.
●Visit the website of the financial institution that you are willing to take a gold loan from.
●Select the gold loan tab where you can enquire about the gold loan by giving some personal details.
●Fill up the application form.
●You will need to fill in certain details such as if you are self-employed or a salaried professional or housewife (although anybody can get the gold loan regardless).
●You will also need an identity proof (PAN and Aadhaar card copy), one address proof (electricity bill, ration card, passport, or telephone bill) and one signature proof (passport copy, driver’s license etc).
●Also, you will need two passport-sized photographs that you might have to upload.
Merits of an Online Gold Loan
●It is fast and easy to process as the gold loan can be applied through a website, calculated using a gold loan calculator and you only have to visit the lender once to submit the gold articles.
●You are not asked to show any income proof or credit card history; you only need a gold asset to pledge.
●You only need to produce a few documents and the process is quite simple.
●Most of the loans require your credit score, however, in the case of gold loan, the approval does not depend on your credit score.
●Applying for gold loans online from trusted financial institutions such as Muthoot Gold Loan Online is a seamless experience.
Demerits of an Online Gold Loan
●Loan-to-Value Ratio: A gold loan, gets you a certain amount of the market value of the pledged gold as the loan amount. The loan amount is given based on the Loan to Value ratio (LTV). This ratio varies from lender to lender and goes up to a maximum of 80% of the value of the pledged gold.
●Lenders Can Auction Your Gold: If you fail to repay your gold loan within the tenure you agreed upon, the lender has all legal rights to auction your gold.
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