Agri-Gold Loan Details-Documents
Looking for an Agri-Gold Loan? Learn about the requirements and documents you'll need to apply. Get the financing you need for your agricultural business today.
Financial needs can arise for anyone, be it a salaried professional, business owner, or those involved in agriculture or allied activities.
Agriculture is considered to be the backbone of the Indian economy, therefore the government along with both public and private lending institutions promote lending to the sector, including in the form of gold loans.
Many households have passive gold jewellery, which they use only once in a few years on special occasions like a wedding. Therefore, it has become a popular source of raising funds by using the latent asset temporarily to tide over short-term needs for cash through a gold loan.
A gold loan is a secured form of credit that a borrower obtains from a bank or non-banking financial institution by pledging their gold to the lender as security. The gold jewellery is temporarily held by the lender, who secures the loan with it. The jewellery is returned to the borrower after repayment of the borrowed funds.
Purpose Of Agri Gold Loans
Agriculture gold loans are aimed at providing farmers easy access to quick cash to be used for agricultural and allied activities. They are designed to meet the short-term production and investment credit needs of:
• The farmers, engaged in agriculture, cultivating own and /or leased land, or engaged in the cultivation of crops
• Farmers in allied activities such as dairy, poultry, fisheries, and piggery, among others along with entrepreneurs and farmers who need investment credit for acquiring farm machinery, undertaking land development, irrigation, horticulture, and transportation of agri produce.
• All other farming activities which are permitted to be classified under agriculture as per the guidelines of the Reserve Bank of India, Government of India, and NABARD.
Procedure For Agri Gold Loans
The procedure to obtain an agri gold loan is similar to any other gold loan. The borrower first needs to submit an application and the required documents to a bank or non-banking finance company. This can be done online or in person at the lender’s branch.
In the case of such a targeted loan, the borrower may need to provide proof of being engaged in the agriculture sector or its allied activities.
The lender then verifies the information provided and also examines the weight and purity of the gold that will be held as security. After the quality and value of the gold are assessed and the Know Your Customer (KYC) procedure is finished, the financial institution and the customer agree on the loan amount and terms of the gold loan, including processing fees and tenure of the loan.
After this, the amount can be instantly deposited by the lending organisation directly into the bank account of the borrower.
Features Of Agri Gold Loan
To make gold loans more easily accessible to those engaged in farming and allied activities, the interest on such loans is more reasonable than other forms of credit.
While the features of the gold loan on offer may differ from lender to lender, most financial institutions waive off processing feed for small ticket loans and the size of the loan may go up to multiple lakhs.
Usually, no preclosure or prepayment charges are levied on agriculture gold loans, and they come with options for easy repayment tenures.
The loan is based on the quality of the gold submitted collateral, which must be above 18 karats of gold to get the maximum loan amount.
The gold is kept safe in bank vaults during the tenure of the loan and is returned to the customer upon full repayment of loan. Some banks also provide the option of loan renewal.
What Documents Are Required?To apply for an agri gold loan the applicant must submit the necessary paperwork to the lender along with the application such as:
Photographs of the applicant along with a duly-filled application form
Identity proof—Any one of PAN card, passport, driving license or voter’s ID.
Address proof—Any one of passport, driving license, electricity bill or gas bill
Some lender may as for record of land ownership such as 7/12 extract in states like Maharashtra
The borrower may be required to furnish proof of allied agriculture activity
For higher value loans the borrower may need to submit PAN card details
Agriculture gold loans have emerged as a resource that has helped many farmers by allowing them to diversify their businesses and stop depending solely on agricultural production.
Farmers also gain from the fact that agriculture loans have favourable interest rates and a flexible payback schedule.
Reputed lenders like IIFL Finance have ensured that these loans are supplied to farmers and business owners in a simple and uncomplicated manner by clearly outlining all the terms and conditions and making sure there are no hidden fees assessed.
IFL Finance offers gold loans using a totally digital process that can be finished from any location in a matter of minutes. Crucially, it gives farmers individualised loan alternatives to make sure the money meets their capital needs and that the disbursement and repayment correspond to the planting and harvesting seasons.
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