If you’re in need of some extra cash, you should look into shops for gold loans. While these are not the best choice for borrowing money, you might find that gold loans are the easiest way to get the cash you need. If you don’t want to risk your gold, try a bank or a non-banking financial institution. But if you’re in need of a quick gold loan, you’re better off looking into shops that specialize in lending.
ICICI Bank
ICICI Bank offers low interest rates on gold loans. Whether you are considering purchasing a gold jewellery piece for your wedding or simply want to use the money for other purposes, they can help you finance your dream purchase. The rates and repayment terms vary with the product variant, but the best loan rates are usually between Rs 2,506 and Rs 3,589 per gram. The ICICI Bank loan for gold is available for 22 carat gold, at a rate of Rs 3,589. This is the average gold rate over the last month.
An ICICI Gold Loan is available online or offline. In the case of an offline application, you will be greeted by a friendly bank executive who will guide you through the loan scheme. First, you must fill up an application form. During the process, the bank executive will determine the weight and purity of your gold. After a thorough assessment, the representative will give you a loan amount. The loan amount is based on the loan to value ratio. The higher the ratio, the lower the interest rate.
NBFCs
Gold loans have traditionally been sought by the lower-middle class. However, the recent surge in international borrowings indicates that banks have not loosened their purse strings. It is only reasonable to ask whether NBFCs have proper checks and balances. And, as the average loan size has increased to over Rs 1.2 lakh, it is likely that the loans will be higher-ticketed for this segment of the population. You may have noticed that a lot of jewellery is sold as scrap gold. While you may be able to get some cash for this, the amount of money will be considerably less than the value of the piece. Whether the jewellery piece is beautiful or not will have little to do with the actual price of the gold. Even so, it may be an appealing option if you need cash fast. You should, however, have an idea of the value of the pieces before contacting a Scrap gold buyers.
While gold loans are secured, NBFCs charge higher rates than banks. Banks, for example, charge a one-to-two percent processing fee and charge interest on a diminishing balance. The rate of interest charged by NBFCs is higher because of their increased cost of funds. However, if you have an existing bank relationship with one, you may find better terms. NBFCs charge a higher interest rate than banks. Besides, they are not allowed to collect low-cost short-term deposits.
Non-banking financial institutions
There are numerous benefits of getting gold loans from non-banking financial institutions. They are secured loans and the gold they hold is the security. They can be used for any purpose besides illegal activity or stock market speculation. A gold loan from a non-banking financial institution carries lower interest rates and less restrictions. In the past, banks charged an average interest rate of 12.5%, while non-banking financial institutions charge around four to five per cent.
Banks are also a good option for gold loans, but their maximum loan amount is lower. NBFCs such as Muthoot Finance and Manappuram Finance offer loans up to Rs 1 crore, with no maximum. ICICI Bank and HDFC Bank charge a processing fee of up to one per cent of the loan value. NBFCs are not allowed to collect short-term deposits, which make them attractive to borrowers.
Some banks
Although you might not be able to find the lowest interest rate with a traditional bank, some NBFCs do shop for gold loans. These lenders may not charge valuation fees and might offer better terms and lower interest rates. Before you apply for a gold loan, you should know your financial situation and the current trend in the market. A good rule of thumb is to look for a lower interest rate and a higher loan to value ratio.
Another benefit of these loans is the fact that they are backed by liquid collateral – liquid cash! In addition, people across India have traditional affinities with gold ornaments, and they’re emotionally attached to family heirlooms. This emotional connection acts as a further deterrent against default. This is what makes gold loans different from other types of commodity lending. A few things to keep in mind when considering a gold loan.
Online lenders
There are many advantages of applying for gold loans online. One of these is that you can complete the application process on your own. Online gold loans shops have all the information you need to process your loan in one place. The entire process is free, and they will visit your home to evaluate your gold. The amount of money you can borrow will depend on the gold’s purity, and the processing fees associated with them. Generally, gold loans with higher purity will get you a higher loan amount. However, gold ornaments with other stones may not fetch you a good loan amount. The bank subtracts the weight of other stones from the gold’s net weight.
Conclusion
Another benefit of gold loans is that they offer low interest rates. Most online shops offer flexible terms and conditions, and the process of applying for one takes as little as 30 minutes. Many people find this to be a convenient way to finance their purchases, and they are able to repay them in a few years. However, it’s important to keep in mind that the price of gold may increase faster than the loan’s interest rate. Therefore, these loans are not suitable for everyone.
