Gold Loan Process and Eligibility - A Complete Guide
Gold loans have emerged as a popular financial product in the country, allowing individuals to unlock the value of their gold jewellery or ornaments to meet their immediate financial needs. The gold loan process in India provides a convenient and accessible way for individuals to access funds quickly, often without the need for extensive documentation. This collateral-based approach allows lenders to offer loans with minimal risk, as the value of gold serves as security against the loan amount. What's more! with the launch of gold loan at home service, you need not step out of your home whatsoever.
What is a Gold Loan?
A gold loan is a type of secured loan where you pledge your gold jewellery to borrow money from the lender. The pledged gold is considered collateral. Depending on the purity and weight of the gold that you submit, the loan amount is sanctioned.
Read More: What is gold loan
Key features of a Gold Loan
- Secured Loan: Backed by gold as collateral.
- Quick Disbursal: Often approved within hours.
- Minimal Documentation: Basic KYC required.
- Flexible Repayment Options
- No Income Proof Required: Loan is based on gold value
- Loan-to-Value (LTV): Up to 75% of the gold’s market value.
How does it differs from other types of loans?
Gold loans provide a hassle-free borrowing solution. They differ from other loans in the following ways:
- Unlike personal loans, gold loans are secured, leading to lower interest rates.
- Faster processing due to the collateral-based nature.
- No need for extensive credit history or high CIBIL score.
- It does not require income proof or asset verification like for home or business loans.
Offers more flexibility in repayment compared to traditional loan products.
Gold Loan Process: 4 Easy Steps
The gold loan process includes the following steps.Step 1: Application
The first step of taking a gold loan is to apply to a bank or a non-bank financial company. There are two ways to apply: in-person (at a lender's branch office) or online. In urban areas, borrowers prefer the latter option. Also, have gold loan at home serviceStep 2: Evaluation
The lender’s representative will contact you after submitting your application. A representative may come to your home to examine your gold if you have opt for loan at home service. The purity of gold is the first thing financial institutions check. The appraiser determines the price and quality of the gold.Step 3: Documentation
The lender follows RBI Know Your Customer (KYC) guidelines to complete the KYC process. You need to keep your KYC documents for Gold Loan ready to complete this process.Step 4: Approval and Disbursement
Once the applicant confirms their consent to the gold loan amount and other terms, the lender approves the loan. The processing fee for gold loans ranges from 0.10% to 1%.Gold Loan Process: Documents Required
To obtain a gold loan, the applicant must provide the following documents required for gold loan1. Proof of identity: Aadhaar Card, PAN card, passport, driving license, or voter ID card.
2. Proof of address: A passport, driving license, electricity bill, or gas bill.
It is important to note that no proof of income is mandatory to obtain a gold loan.
Who Is Eligible For A Gold Loan?
The following individuals are eligible for a gold loan:
- Individuals with gold jewellery are eligible to apply.
- Applicants should be between 18 and 75 years old.
- Professionals, self-employed individuals, business owners, and others can obtain loans against gold.
Since this is a secured loan, you don't have to worry about a poor credit score.
What Are The Features That Make The Gold Loan Process Easy and Fast?
Gold loan schemes have several prominent features, including the following.
• Faster Processing:
The eligibility criteria for gold loans are straightforward, requiring minimal documentation since these are secured loans. Thus, lenders usually disburse loans within a few hours.
• Lower Interest Rate:
Gold loans charge lower interest rates than unsecured loans, such as personal loans.
• No Processing Fees:
In many cases, banks and NBFCs do not charge processing fees for gold loans. If lenders do charge a fee, it is usually 1%.
• No Foreclosure Charges:
Banks and some lenders impose 1% prepayment penalties, while others don't charge any at all.
• Income Proof Not Required:
Since gold loans are secured against gold, lenders do not generally ask for income proof. Therefore, gold loans are available to everyone, regardless of income level.
• The Credit Score Is Not Required:
For most loans, the amount is based on the borrower's ability to repay and credit history. Gold loan approvals do not require your credit score.
How to Apply A Gold Loan With IIFL Finance
Access safe, swift, and budget-friendly gold loans with IIFL Finance. Enjoy benefits like minimal paperwork, instant disbursals, low interest rates, and flexible repayment plans tailored to your needs. Your pledged gold is stored securely in modern, insured lockers for complete peace of mind.
Applying is simple – just visit the IIFL Finance website or nearest branch, fill out a quick form, submit basic KYC documents, and receive instant approval and disbursal.
Wondering how to take gold loan? It's easy with IIFL – check your eligibility online, pledge your gold and receive funds in just a few hours.
FAQs
Q1. How long does it take to process a gold loan?
Ans: Gold loans are processed instantly. After completing the verification process and choosing a scheme that meets the requirements, lenders appraise the gold within minutes and approve your loan.
Q2. What are the interest rates on IIFL Finance Gold Loans?
Ans: IIFL Finance gold loans carry interest rates ranging from 11.88% to 27% per annum.
Q3. What is the process of gold loan renewal?
Ans. The gold loan renewal process at IIFL Finance is fairly simple. Start by contacting your nearest branch or relationship manager to express your interest in renewin the gold loan. IIFL Finance will review your repayment history, check your financial situation and send your pledged gold for re-evaluation. If you meet all the eligibility criteria, you will be offered a fresh loan but the tenure and interest rates will be updated. Once approved, the loan amount will be transferred to your account instantly.
Q4. Is there a processing fee involved in the gold loan process?
Ans. The processing fee depends on the gold loan scheme that you have opted for and the loan amount being sanctioned. Remember to carefully read the loan sanction letter at the time of disbursement.
Q4. What is the process of gold loan renewal?
Ans. The gold loan renewal process at IIFL Finance is fairly simple. Start by contacting your nearest branch or relationship manager to express your interest in renewing the gold loan. IIFL Finance will review your repayment history, check your financial situation and send your pledged gold for re-evaluation. If you meet all the eligibility criteria, you will be offered a fresh loan but the tenure and interest rates will be updated. Once approved, the loan amount will be transferred to your account instantly.
Q5. Is there a processing fee involved in the gold loan process?
Ans. The processing fee depends on the gold loan scheme that you have opted for and the loan amount being sanctioned. Remember to carefully read the loan sanction letter at the time of disbursement.
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Apply NowDisclaimer:The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.
