Securing a loan that offers a low-interest rate and high tenor is one of the biggest concerns for individuals. Though there are various loan options, the gold loan provides you access to quick funds with ease. Considered to be the best choice, it allows individuals with low CIBIL scores to avail of loans.
With various low interest gold loan available in the market, it is essential to know the top 5 things one should consider before applying for the loan. But before finding the points, let us look at the essential eligibility criteria linked to the gold loan.
Gold Loan Documentation Needs
Unlike any other loan, the gold loan can be attained with low documentation needs and following the basic eligibility criteria only. Considered to be a loan for all, the primary features that one should know about the gold loan application are as follows:
- An Indian can apply with age between 18-75 years. A co-applicant might be required if the applicant’s age is above 70 years.
- The candidate must be working, salaried, self-employed, or even an agriculturist.
- The applicant should have a savings account.
- The gold pledged should be 18-24 karats.
- Oan should be applied for a minimum of 6 months.
- Once the applicant is clear for the basic eligibility criteria, the set of documents that are required to be submitted include the
- Proof of Identity and Proof of Address can include Aadhar card, PAN card, Passport, Voter ID, Driving license, or any other address document issued by a state or central government.
- A set of 2 recent passport-sized photographs
- An additional income statement can be a salary account statement, pay-in-slip, form 60, or any other document defined under the Income Tax Act of 1962.
Top 5 things to consider when applying for Gold Loan
Once the applicant’s eligibility criteria and documentation needs are cleared, the gold loan amount will be disbursed within 24-48 hours, making it one of the best options to fulfil the financial needs. The top 5 things that you should consider before applying for the gold loan are as follows:
Check for lenders credibility
There are various gold loan lenders operating in the market. The applicant needs to check the credibility of all the lenders before applying for the same. Knowing about the ratings and previous lender experience can help you get the loan favorably without being trapped in debt.
Always opt for a low interest rate.
A low-interest rate gold loan should always opt as this will offer you funds while helping you have less pressure on your financial management. Comparing all the options available will help identify the best gold loan that can help a great deal.
Look for repayment methods.
Lenders typically provide several gold loan payment alternatives. Some lenders even enable you to pay the interest first, followed by the principal at the end of the term. On the other hand, others insist on making interest rate payments monthly, quarterly, semi-annually, and yearly. Prefer the one that offers you the autonomy to choose.
Analyse the loan amount
The general LTV ratio that is allowed by the RBI is 90% of the gold value pledged. It is always advisable to seek a gold loan from a lender that offers you a high LTV ratio. The main benefit is that it will help you to get more loans with less gold.
Confirm the tenor for the loan
The gold loan is also considered to be a short-term loan. It means that this loan is available for 6 months as well. It is always advisable to look for a gold loan that allows you the flexibility to opt for the tenor required. The typical tenor is between 6-36 months, but it may vary for different financial institutions.
Gold loan is one of the most preferred financing options considered by borrowers fulfil their financial needs. Being suitable for various purposes, you can use this loan for both personal and professional use. Additionally, with the help of the low-interest rate gold loan offered by NBFCs like Bajaj Finserv, one can easily meet their immediate needs. To know more about the various options, visit the platform and check all the offers available with just a click.