Hdfc Gold Loan Interest Schemes

 

The gold loan, also called a loan against gold, is a secured loan that a borrower takes out from a lender in lieu of gold jewelry. The loan amount that you are approved by the lenders is usually equal to a certain percentage of the value of gold. You can repay it in monthly installments and then get your gold items back. Unlike other secured loans, such as a home or car loan, there are no restrictions on the end use of gold loans. Whether you need to finance a wedding, a family vacation, or your child's education, it's a great way to meet your sudden cash needs. Moreover, many private and government banks as well as NBFCs offer gold loans at affordable interest rates. A few of them are SBI, Axis Banks and HDFC gold loan interest schemes.

How does the gold loan work?

The entire process of gold loan is very similar to other secured loans. You take your gold items along with the required documents to a lender. The lender evaluates the gold items and reviews the submitted documentation. Based on the valuations, the lender approves the loan amount. According to the loan agreement, you pay off the loan amount along with the interest amount and get back the pledged gold items.

Who can apply for a gold loan?

Anyone who owns gold can apply for a gold loan in person or gold loan apply online. Unlike personal loans, which have strict eligibility criteria, gold loans can be availed by anyone residing in India, such as employees, businessmen, housewives and even farmers. You do not even have to have a good credit score to get a gold loan. So if you have a low credit score, you still have a chance to get money provided you have enough gold to pledge.

What is the interest rate at which the lenders provide the gold loan?

The gold loan is a secured loan; therefore, its interest rate is low compared to unsecured loans like a personal loan. Interest rates on gold loans vary from lender to lender and depend on various factors such as the term of the gold loan, the loan amount, etc. It also depends on where you take the gold loan - a bank or an NBFC? Banks usually charge lower interest rates on gold loans than NBFCs. So if you want to apply for a gold loan, do not accept the first offer you get. Compare gold loan offers from at least two to three lending institutions and then make your choice.

What is the term of the gold loan?

The term of the gold loan varies from credit institution to credit institution. As a rule, it is between 3 and 12 months. Depending on the case, some lenders even offer a longer term or allow you to extend the loan. Since the term of the gold loan is shorter compared to other types of loans, you should make sure that you repay the loan amount on time. A late payment can cause you to lose your gold items forever.

How do lenders determine the amount of the gold loan?

Before approving the loan application, lenders check the purity and weight of the pledged gold. Based on this, the market value of the gold is determined based on the current rate, which in turn helps determine the final amount of gold to be approved by lenders. Most lenders offer a gold loan worth up to 75 percent of the market value of the gold pledged. For example, if your gold is worth 2 lakhs, the amount of credit approved to you will not exceed 1.5 lakhs. In addition to the loan-to-value ratio, the loan amount also depends on several other factors such as the term of the loan and the borrower's repayment capacity.

How to repay the gold loan?

How you can repay your gold loan depends on your lender. With most lending institutions, you can repay interest only each month and the principal amount at the end of the term. You can also repay your gold loan in equal monthly installments (EMI) that include both the principal and interest portion of your loan.