The gold loan industry has seen a huge growth in the last decade. The borrowers who get gold loans usually want to get it in a short period. Many borrowers also get loans for an asset they own, in which case, the loan is extended to the asset as well. For example, if you have a plot of land and want to buy some silver and gold jewellery, the bank will extend the loan to you and pay it back. The gold and silver jewellery will be used as collateral for the loan. When the loan is repaid, the gold or jewellery will be returned as collateral to the bank, and you get it back. Gold loans are different from personal loans in several ways. A personal loan is a loan taken to fund a business venture, investment, or some other kind of capital outlay.
Gold loans are an excellent option for people who have large jewellery or valuable gold items in their possession. The best gold loan in Hyderabad comes with certain benefits like easy terms and low-interest rates, along with a guarantee from the banks for timely loan installments.
The gold loan is one of the most common types of loans; it is generally opened by people between the ages of 18 and 40 to fund their personal needs such as wedding expenses, save money, pay for education, or start a business.
Why Choose a Gold Loan?
Gold loans are often considered short-term loans. The interest charged on a gold loan is low compared to any other loan. Since a gold loan is secured against gold, there is lesser risk involved. If an individual does not pay the loan back in time, the loanee will not have to suffer a heavy loss.
There are different ways in which gold loan companies in Hyderabad provide gold loans. You can get a gold loan by bringing an item of gold to the bank or bring the jewellery to the bank itself. Depending on your choice, you will have to make several payment terms before you can claim the loan amount.
After making a payment, you will be provided with a certificate that confirms that you have provided a gold item and a copy of your ID card to the bank.
Why is there a need for gold loans?
Bank loans are generally short-term, and they carry a lower interest rate compared to loans from credit societies or pawnshops. These are the best types of loans if an individual wants to take care of an urgent financial need. There is a possibility that the gold loans might default on loan repayment in the short term.
In these circumstances, taking a gold loan is a suitable alternative, especially if the amount borrowed is around ₹50,000 or less. The exact amount of gold required for securing a gold loan depends on the applicant’s background. The loan amount needs to be higher if the applicant has a substantial amount of wealth.
There are several benefits of gold loans over conventional loans. These include:
Gold loans have an interest rate with a financial capacity to repay loans in full within one month and sometimes within a month or two. Moreover, gold loans in Hyderabad are much better than personal loans as they have lower interest rates, require minimal documentation, and can be availed easily.
Eligibility Criteria for Gold Loan
Nowadays, gold loan is being issued with various eligibility criteria. You should be in a good financial condition to take a gold loan. Depending upon the personal needs of the individual, the amount that can be availed varies as well. Moreover,
- The applicant must be a citizen of India.
- The applicant must be aged between 21-60 years.
The banks take care of the cost of gold, additional gold taxes, and processing charges as part of the loan processing fees. The borrowers must also make sure that they don’t have any form of property liability.
How to Apply for a Gold Loan?
To avail of a gold loan, you have to visit the nearest branch of your bank and make an application for an unsecured loan. It will need the following documents:
- Proof that you are a citizen of India
- Aadhar Card
- Two Passport Photos
- Latest income details from the tax department
- Bank account statement
- Credit Report
- KYC Documents
- Acknowledgment of possession of the gold (jewellery, bank-issued coins)
- One form of self-attested proof of you keeping the pledged gold
- Self-declaration that you won’t dispose of the pledged gold
Some banks offer these loans even without the three documents above as proof of your possession of gold, for which they would only charge the gold price.
Now, you know what gold loans in Hyderabad are all about. If you find yourself in a tight financial situation and are looking for options that will ensure that you can have quick access to the money you require for your immediate use, then get the highest gold loan per gram in Hyderabad; this will be the one for you.
Gold loans are available to customers with a good credit score as well. A good credit score might also help you get a gold loan in the first place if you are eligible for one. There are many agencies in India which assess your creditworthiness and offer loans accordingly.