Gold loans are the best option for meeting cash needs in an emergency. The best thing about a gold loan is that neither you need a good credit score nor any income proof to take advantage of it. Anyone above 18 years of age can take a gold loan. Banks and non-banking financial companies (NBFCs) offer gold loans. This loan is one of the cheapest and most hassle-free options for availing instant cash. Know some of the features of a Gold loan …
1) Tenure: Gold loans are usually issued for a tenure of up to 2 years and after that period you can renew the loan.
2) Collateral: In case of a debt of gold, you have to keep gold (in any form, jewellery, bar or coin) in the form of collateral. Banks lend up to 80% of the value of gold in the form of loans.
3) Repayment: In the case of a gold loan, you get a convenient repayment option. You can either go for the EMI option or opt for bullet repayment. Partial repayment is also available in the case of a gold loan.
4) Credit score: You do not need to have a good credit history to take advantage of a gold loan. But if your credit history is good, then you can take a gold loan at cheaper rates.
5) Documents: There are very few documents required to avail of a gold loan. To avail of this loan, all you need is proof of identity and address.
6) Interest rate: As a gold loan is a secured loan, the interest rate on it is less than a personal loan, which is an unsecured loan. Currently, personal loans are available at interest rates between 10-15% depending on your job profile and credit score. But a gold loan can be availed at an interest rate starting from 7%. There are five banks that charge the lowest interest rate on gold loans.
Bank Name with its Interest Rate
Punjab and Sind Bank 7%
Bank of India 7.35%
State Bank of India 7.5%
Canara Bank 7.65%
Union Bank 8.2%