Gold is one of the popular and valuable metals in India. Almost every household buys gold at some point. It brings with a sense of financial safety in times of crisis. The best part is that it holds its value even during inflation. So, people prefer to buy gold to earn some extra money while reselling it. Given the gold price in India today, especially in Vijayawada, it may be the right to invest in gold.
Besides that, gold offers the best way to access instant funds to meet your financial requirements. You can pledge your gold to a lender and avail yourself of a loan based on your needs. It is worth noting that your loan amount depends on the value of your gold in the market. So, if the gold price today in Vijayawada is high, you will have more money in your hand as a loan.
So, how does a gold loan work?
A gold loan is a secured loan with which you can get the required loan amount against your gold jewellery at affordable interest rates. The benefit of a gold loan is that it serves multiple purposes, which means that you can use the sanctioned loan amount to cover a medical emergency, wedding, education, travel, home renovation, etc. Also, you can avail of lower interest rates as compared to other loans in the market.
It is worth noting that if you fail to repay the loan amount on time, your lender may use your gold and recover the amount. Till the loan amount with interest is paid in full, your gold remains with the lender.
Here are some of the features and benefits of a gold loan:
- It comes with affordable interest rates, which means that you do not have to worry about the repayment as the EMI amount will be a lot lower.
- You can get the loan amount within just hours after the overall procedure is done. You will have to submit your gold jewelry to your lender. After that, your lender will authenticate your gold and transfer the loan amount into your bank account.
- You can choose a loan tenure based on your needs. It generally ranges between 12 months and 84 months.
- Based on the current gold price in India today, you can avail of a higher loan amount. Keep in mind that you can secure up to 80% to 90% of your gold’s value as a loan.
What is the procedure for applying for a gold loan?
It is crucial to know the overall procedure of the gold loan before applying for one. There are mainly six steps involved in a gold loan – Gold loan application, gold submission, evaluation, documentation, authentication, and repayment.
- Gold loan application
The first step is to apply for a gold loan. You can apply through a bank or non-banking financial institution. There are two ways to do so. You can apply online or offline. For the online process, you will need to visit your lender’s website and submit your application. As with the offline process, you will need to go to the nearest branch and fill in the application form.
- Gold submission
After filling in your gold loan application form, you will need to submit your gold jewellery to your lender as collateral. Keep in mind that you will have to visit your lender to submit your gold. It can not be done online.
- Gold evaluation
After receiving your gold, your lender will calculate the overall value of your gold. It is determined based on the gold price in Vijayawada today. The gold evaluation process determines how much you can borrow against your gold. The higher the value of gold in the market, the higher will be the loan amount.
- Documentation process
Once the evaluation process is complete, you will need to submit the documents required by your lender. The upside of a gold loan is that there is minimum documentation involved, which are:
- Recent passport-sized photos.
- Identify proof: Aadhaar Card, Driving Licence, or Voters ID Card
- Address proof: Passport, Utility Bill, or Aadhaar Card.
After all the above-mentioned steps, your lender will check your eligibility for a loan. Your lender will check if you are within the age bracket. Your income and credit score plays a crucial role in your loan application. Your lender will authenticate all these details before disbursing the loan amount into your account.
- Gold loan repayment
In this step, your lender allows you to choose a repayment option based on your needs. You can opt for EMI payment, advance interest payments, interest payments at regular intervals, or Bullet repayment.
So, if you are applying for a gold loan to meet your financial requirements, make sure to check the gold price in India, especially in Vijayawada to determine the value of your gold. The higher the market value of your gold, the higher the will be the loan amount.