When you need cash urgently, apart from borrowing from friends and family, people mostly opt for a loan from the property, Gold Loan, or Personal Loan. Loans from property and Gold loans are secured loans as they require property and loans as security respectively. Among these three main options, people mostly prefer taking a Gold loan because it takes minimum processing time and maximum repayment flexibility.
An individual can apply for gold loans easily by keeping their gold jewellery, ornaments, etc. as collateral. Along with various banks such as ICICI Bank, HDFC Bank, SBI Bank, Non-banking Finance Companies (NBFCs) also offer gold loans. The various examples of the Non-banking finance companies are Muthoot Finance, Manappuram Finance etc. These non-banking finance companies usually charge no fees for granting a gold loan, and also they have shorter loan processing time.
Various factors such as purity of gold, internal policies of the lender, and the minimum and maximum value set by the lender decide the amount of loan an individual can get against the gold ornaments. There are limits set by various banks and NBFCs such as SBI offers loans between Rs 20000 to Rs 20lakhs, the minimum value of loan given by ICICI bank is Rs 10000 while the maximum value is Rs 1lakh, on the other hand, a non-banking finance company Muthoot Finance provides a minimum value of Rs1500 as a gold loan while it has no maximum limit.
THE FOUR LEADING NON-BANKING FINANCE COMPANIES FOR GOLD LOAN
They have minimal documentation requirements and also extremely short processing time, because of these reasons, it is one of the top gold loan providers of the country. They have various outlets in India and also provide attractive interest rates of 14% onwards. Any individual who has an age of more than 18years and has 18 or 21 carats gold jewellery to pledge can get a gold loan from Muthoot Finance, and that individual can get a loan ranging from Rs 1500 to Rs 1crore for up to a period of 15months. And also, they do not charge any penalty as prepayment charges, though they take a processing fee up to Rs500. If an individual makes late payment of the loan, then the interest rate depends on various factors, and usually, the bank prints the interest rate on the loan agreement itself.
India Infoline Finance Limited
The eligibility criterion is that any salaried or self-employed individual or student of 21years or more can get a gold loan. The gold loan interest rate is 12% onwards, and they provide a gold loan of minimum Rs 3000 to maximum Rs 10lakhs. For late payment, the interest rate depends on various factors such as the amount borrowed and the tenure of the loan. Neither do they charge any processing fee nor do they take any prepayment penalty. The loan tenure can be from 3 months to 11 months.
Manappuram Finance Limited
The maximum amount that they provide as the gold loan is Rs1crore and any individual who has an age of 18years or more and has 18 or more carats of gold can get a gold loan. The gold loan interest rates they tend to charge on the period for which an individual avails the loan and also it is one of the most famous gold loan providers. Though they take up to Rs200 as processing fee but do, they do not take any prepayment penalty charges. The interest rate on late payment is 3% on the outstanding principal amount from the date of default.
By taking a gold loan from Bajaj Finserv, you have an advantage that you can avail of it at your doorstep. In certain regions, they even provide the facility that an evaluator will come to your home and check the purity of the gold ornaments you want to pledge with the help of a carat meter. One needs to be between 21 to 70 years to get a loan from Bajaj Finserv, and the individual can be salaried or self-employed.
They provide a gold loan of a minimum amount of Rs 25000, and the maximum amount is of Rs 25lakhs. The tenure of the loan can vary from 1month to 36months, having a gold loan interest rate of 8.8% onwards. Up to 6 prepayments are allowed in a year having zero prepayment charges. The interest rate on late payment charges is 3% on the outstanding principal amount from the date of default.