How To Avail A Gold Loan At Your Home - Explained

Availing gold loan from the comfort of your home has now become easy! Want to know how? Get insights on the hassle free process to get gold loan by IIFL Finance!

4 Jul,2022 05:20 IST 32 views
How To Avail A Gold Loan At Your Home - Explained

Gold loan is the fastest-growing mode of personal borrowing in India in terms of the rise in amount being lent by banks and private finance companies. This has been possible because of the rise in the price of gold, which allows owners of the yellow metal to borrow more, and due to the aggressive marketing and outreach of the financiers.

Availing a gold loan is a much swifter form of personal loan and affordable, too, as it carries a lower interest rate compared to the plain-vanilla personal loan. The process of getting a gold loan is also getting simpler and quicker.

Let’s begin with the basics.

What Is A Gold Loan?

A gold loan is a product for short-term finance that one avails, if one has a small to large stash of gold jewellery at one’s disposal with past purchases. Many households have passive gold jewellery, which they use only once in a few years on special occasions like a wedding.

One can use such passive assets temporarily to tide over short-term needs for cash.

All lenders accept gold jewellery as a form of security or collateral. Some banks accept low weighted gold coins, too. But items like gold bars, gold biscuits or gold utensils are not taken as collateral.

A lender keeps the gold jewellery in a safe vault, against which it lends money to the owner of the gold jewellery. Unlike a home loan, which can have repayment terms extending to 20-30 years, gold loans are usually of a much smaller tenor of up to two years. Gold loans are also of much smaller ticket sizes, of as low as Rs 1,500.

Selecting A Lender

The next step is to choose a lender. One can decide between their existing banks, reputable gold finance companies or diversified non-banking finance companies.

One can choose a lender based on various factors such as the interest rate they are charging, repayment terms and how swiftly they process the loan application.

Some prominent lenders also offer the option of doorstep service due to rising competition. Given the competition, processing charges for gold loans are not high, with some NBFCs not even charging such fees.

Gold Loan Approval Process

One can go to a branch of a bank or an NBFC with basic documents like Aadhaar, but gold jewellery is the key. The service personnel will weigh the gold jewellery and, based on the prevailing price of the metal, give an estimate of the maximum loan that can be availed. If it’s agreeable, the loan can be disbursed immediately.

On the other hand, if prospective borrowers wish to avoid going to the branch, large private lenders with vast networks and personnel can send their expert representatives to the borrowers’ homes as per their convenience.

Taking A Loan From Your Home

Here’s a four-step guide to getting a gold loan right from the comfort of your living room.

Step 1:

If you choose to opt for the doorstep service, all you have to do is call the customer sales number of a reputable gold loan provider or fill out their short form available online. The lender’s representative will call back to fix an appointment and could visit as soon as around 30 minutes.

Step 2:

Keep the know-your-client (KYC) documents in place. Most importantly, keep the gold jewellery ready to be pledged as a security at hand. The lenders’ representative would come at the allotted time and check the identity documents. The expert would then inspect the gold ornament and give an upper estimate of how much cash can be borrowed.

Step 3:

The representative will show the various schemes of availing and repaying the gold loan that one is eligible for. The loan amount, tenor and interest rate would depend on which scheme one opts for.

Step 4:

If it is agreeable, the amount can be instantly deposited by the lending organisation directly into the bank account of the borrower.

One needs to keep paying timely interest payments for the loan anytime. This can be done from anywhere and anytime, right with a click of a button on the mobile.

After all dues are cleared, one can seek doorstep delivery of the pledged gold jewellery. In the process, one doesn’t have to step out of the house to either get the gold loan or to repay and get back the jewellery.

Conclusion

While you need to understand the basics of a gold loan before moving to avail it and need to spend some time to decide on the lender, the process of getting a gold loan is simple. It can be availed from reputed companies like IIFL Finance, even without stepping out of one’s home.

In the case of IIFL Finance, a company representative comes to the residence of the borrower to do a quick inspection and pick up the gold jewellery to be kept as security.

The executive then approves instant bank credit into the account of the borrower. The borrower doesn’t need to visit the company’s branch—either for approval, repayment or taking the jewellery back at the end of the tenure—and can complete the entire process from the comfort of their home.

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