Now that we know why gold loans are so popular, we can relate to why it is in demand. But many people don’t know about the various benefits that it provides, so let us look at the various benefits these gold loans provide us. And next, we will discuss the relation between gold loans and the RBI. They can help ail the loan as it can provide them with quick funds. So, now people are coming to know about its various added benefits, which is why it is becoming popular.
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So the various benefits are:
Loan amount: As a gold loan is a secured loan, a gold loan will depend on the gold you pledge as collateral. RBI has fixed the loan-to-value ratio as 75% of the total value of gold pledged to sanction the loan against gold jewellery and ornaments. But the RBI has recently changed the LTV ratio and increased it to 90%. Therefore, this is the relation between gold loan and RBI as it is the deciding organisation about the ratio on which people will get the amount of loan. The amount of loan that you will get will also depend on the lender or bank you avail loan from.
Interest rate: The interest rates of gold loans vary according to the lenders and banks. It depends on many factors such as loan amount, LTV ratio, loan tenure and other such factors. For example, if the LTV ratio is fixed at a higher rate, the lender will charge a higher interest rate to compensate for their risk. Therefore, one should calculate their monthly instalments by using a Gold Loan Interest Rate calculator and, after that, choose a suitable interest rate and a tenure.
Loan tenure and repayment tenure: The gold loan is a short term loan with a flexible tenure that can range between 3 days to 3 years. This can change depending on the different lenders and banks. Banks and lenders also offer a variety of repayment options along with the usual monthly instalments mode. Either applicant can choose to repay the principal amount at the end and all the monthly instalments or pay monthly instalments every month and the principal amount at the end of the tenure. A person can even calculate his monthly instalments before applying for a loan on any website quickly to know if he will be able to repay the instalments or not. One can choose the one according to their convenience. For example, the EMI system will be well suited for a salaried person with a regular monthly income. The non-EMI system will be well suited for self-employed workers who do not have a regular monthly income.
Processing Charges: Usually, gold loans have zero or minimal processing charges that are as low as 1%-2%, or some might charge processing fees of up to ₹ ten onwards. It depends on the bank or lender how much processing fees they will charge; some might charge a fixed percentage that is relatively low, whereas others might charge on the whole amount of the loan.
These are a few of the benefits that attract many people to go for gold loans, and now people can even opt for online gold loans just by sitting at their homes just by the click of a few buttons.
In addition to that, many banks and financial institutions offer these gold loans at reasonable terms and conditions. Some of these banks are ICICI Bank, ICICI Bank, Muthoot gold loan payment, SBI Bank etc. they make your gold loan process much easier by assisting you through the whole gold loan process and offering you ease in terms of features of the loan, such as tenure period, rates of interest, processing charges, documents requirements etc.
Also read this: GOLD LOAN VS CREDIT CARDS