A gold loan is a credit given to a consumer in exchange for gold jewelry, bars, or coins as security. If the loan is not repaid on time, the gold may always be sold on the market to collect the unpaid amount, according to the lender.
Gold has traditionally been kept in Indian families in the form of jewelry. However, except for occasional uses in various types of functions, they mostly sat dormant in vaults. The idea that idle gold may be utilized to satisfy a variety of spending requirements has gained a lot of traction.
What steps are involved in the procedure?
The most advantageous aspect of gold loans is that they are immediate. Because tangible collateral is involved, banks and NBFCs can loosen their due diligence procedures and disburse the Gold Loan Software quickly. Let's go through all of the aspects of getting a gold loan :
Collateral :
Banks provide gold loans in exchange for gold jewelry as collateral. In contrast, NBFCs may only accept gold jewelry as collateral. The quality of such gold should range from 18 to 24 carats. The bank or NBFC in issue will calculate the value of the whole amount of gold to be pledged, and only a portion of it will be lent.
Repayment of the loan: As with all other loans, the client is required to pay a set sum each month. The borrower for NBFCs simply has to pay the interest month after month. The principle can be paid off when the loan is closed. Banks, on the other hand, treat it like a regular loan, with an EMI that includes both principal and interest.
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