Gold loans have emerged as the safest & fastest avenue of credit growth in recent years. Mortgaging gold ornaments to arrange funds is no longer a taboo, and people are coming forward to make the most of the gold valuables lying idle in their bank lockers.
A gold loan in India is a highly secured and liquid asset class that offers a high loan amount to the customer for minimal interest charges. A customer can pledge his gold ornaments like bangles, rings, coins, necklaces, bracelets, etc.; and avail of a loan amount of a percentage of the gold’s value.
Lenders feel confident and secure when offering a gold loan to a borrower as they have the customer’s gold as a security. In case the customer defaults on repayments, the lender can auction his gold ornaments to recover his losses.
There are a few factors to keep in mind when choosing a supplier for a gold loan or a loan transfer. This could help you get the greatest gold loan possible. In addition to the loan-to-value ratio, interest rate, and security, you should consider the various repayment options.
Since gold loans are booming in recent times, there are several financial institutions that offer gold loans to customers. Here is a list of the best gold loan companies in India.
Muthoot FinCorp is the most trusted and reputed name in the world of gold loans. It offers gold loans under different schemes to customers as per their requirements and is known for its quick loan processing and easy loan repayment terms.
They also offer the best gold loan interest rate, which starts at only 6.99% per annum under various gold loan schemes. The documentation process of a gold loan at Muthoot FinCorp is easy, and the customer can get a loan by giving only his ID and Address proof as documents.
The gold loan processing fee at Muthoot FinCorp ranges between Rs.20 and 0.25% of the loan value. There are no foreclosure charges if the borrower wants to pay back the entire loan amount any time after three months of taking the loan. Customers can take a loan of up to Rs. 50 lakhs, depending on the value of their gold ornaments.
HDFC Bank offers gold loans at an interest rate ranging between 9.50% and 17.55%. Customers can take a gold loan from the HDFC Bank only for a short duration of three to 24 months. The loan processing fee is 1%, and the bank levies a prepayment charge of 2% and a foreclosure charge of 2% on the gold loan.
Axis bank offers gold loans to customers at an interest rate ranging between 12.50% and 17.50%. Customers can take a loan of an amount between Rs. 25,001 and Rs. 25 lakhs for a duration of 3 to 36 months.
The bank charges a processing fee of 1% on gold loans and 2% if closed before 3 months and the customer has to pay a foreclosure charge of 1% if the loan is closed between 3 to 6 months, and 0.50% if the loan is closed between 6 to 11 months. There are no foreclosure charges after 11 months.
Customers can take a gold loan of Rs. 20,000 to Rs. 20 lakhs from the State Bank of India. The gold loan interest rate State Bank of India charges is 1-year MCLR + 0.50%. There are no foreclosure charges on early repayment of the loan, and the loan processing fee is 0.25% with a minimum cap of Rs. 250.
ICICI Bank offers gold loans to its customers at an interest rate ranging between 10 to 19.76%. The tenure of the ICICI Bank gold loan can be anywhere between three to 12 months, hence, they are short-term loans.
The bank charges a loan processing fee of 1% on the loan amount. There are late payment charges of an extra 6% if the borrower fails to pay the loan EMI on the due date. There are additional charges like documentation charges and foreclosure charges if the customer wants to repay the loan early.
Gold has a special meaning in the thoughts of Indians. It is priceless both in terms of money and in terms of culture. In our country, gold is the only commodity that has been able to withstand inflationary trends in the past. Gold is an excellent store of value, and its owners have previously utilized it to get emergency financial loans.
Customers can compare the features offered by different gold loan lenders and choose the most suitable option as per their requirements and repaying capacity. Lenders like Muthoot FinCorp offer quick and hassle-free online and online loan processing with zero hidden charges.
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