Cheapest Loan Rate: Sometimes there is a sudden need for more money. In such a situation, money can be arranged by taking a personal loan. Although its rates are high, such as the country’s largest bank SBI, personal loan is available here at an annual rate of 9.6 percent to 15.65 percent and processing fees have to be paid at the maximum rate of 1.5 percent. In such a situation, taking a personal loan becomes expensive for some people. In such situations, Gold Loan comes out as a better option, where you can arrange money at the rate of 7 percent.
Gold loan is a type of secured loan that can be taken by pledging gold jewelery or gold coins. To get this loan, one has to deposit his gold with the bank or NBFC (Non-Banking Financial Institution) which is returned on repayment of the entire loan along with interest. You can get a loan up to 80 percent of the value of the pledged gold.
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Gold Loan Rates in Various Banks
Gold loan is a secured loan, due to which money can be managed through it at low rates. Punjab and Sind Bank is providing Gold Loan at lowest rate. You can get a loan of Rs 2-25 lakh from this bank with a processing fee of 0.50 per cent and a gold loan at the rate of 7 per cent. The rate and processing fee at which other banks / NBFCs including SBI are giving loans are given below-
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Special Features of Gold Loan
- Since it is a secured loan, those who do not have a good credit history, ie low credit score, also get loans easily.
- You also have the option to pay only the interest and repay the principal loan amount in one lump sum on completion of the loan tenure.
- This loan is obtained by pledging gold, so very little paperwork is required to get it. It usually requires personal ID and address proof.
- This loan can also be obtained in just 5 minutes.
- One thing should be kept in mind that even if the gold jewelery you are pledging has any precious stone in it, its valuation will be done on the weight of the gold in the jewellery. Apart from this, banks or NBFCs pledge gold jewelery but do not take bars. Certain gold coins are definitely accepted.
- If the loan is not repaid, the bank/NBFC can confiscate the pledged gold. In such a situation, the more amount you can repay, the better it would be to take a loan.