A loan against gold is a popular form of secured loan that involves pledging gold jewellery or gold coins as collateral. Borrowers who require quick cash can avail of this type of loan, whereby the loan amount is based on the value of the gold pledged. In this article, we will explain the essentials of loan against gold, including the gold loan per gram rate today.
Understanding Loan Against Gold
A loan against gold is a secured loan, meaning that the borrower must pledge gold ornaments or coins as collateral in exchange for the loan amount. The loan amount is generally a percentage of the value of the gold pledged, and the borrower must repay the loan amount along with interest within the predetermined tenure. The loan against gold is preferred over other forms of personal loans because of its lower interest rates, making it an attractive option for those who require quick cash.
Factors that Affect the Gold Loan per Gram Rate Today
The gold loan per gram rate today is a critical factor to consider while applying for a loan against gold. This rate can vary depending on several factors, including:
- Purity of gold: The purity of gold pledged plays a significant role in determining the gold loan per gram rate today. The higher the purity, the higher the loan amount that can be availed.
- Market rates: The gold loan per gram rate today is also affected by the current market conditions. In times of economic uncertainty or inflation, gold loan rates may be higher.
- Loan tenure: The loan tenure can impact the gold loan per gram rate today as well. A longer tenure may result in a higher interest rate.
Applying for a Loan Against Gold
Applying for a loan against gold is a straightforward process compared to other forms of personal loans. Here are the steps to follow when applying for a loan against gold:
- Pledge gold: The first step is to pledge gold ornaments or coins as collateral for the loan. The lender will assess the value of the gold and determine the loan amount that can be availed.
- Submit KYC documents: The borrower must submit KYC documents such as Aadhaar card, PAN card, and address proof to the lender.
- Application process: The borrower must fill out an application form, providing essential details such as loan amount required, preferred tenure, etc.
- Approval and Disbursement: After the application is scrutinized and approved, the loan amount will be disbursed to the borrower’s bank account.
Repaying the Loan Against Gold
Repaying the loan against gold is essential to avoid penalties, protect your credit score, and secure the pledged gold. The loan must be repaid within the predetermined tenure, along with interest, to avoid interest charges and penalties. You can repay the loan in EMIs, and the borrower can choose the EMI amount and tenure according to their financial situation.
Advantages of Loan Against Gold
Here are some of the advantages of availing of a loan against gold:
- Lower interest rates: Loan against gold has lower interest rates compared to other forms of personal loans, making it an attractive option for those who require quick cash.
- Secured loan: Loan against gold is a secured loan, which means that the borrower must pledge gold as collateral. This type of loan is comparatively easier to avail of than unsecured loans.
- Quick Disbursement: Loan against gold is a quick process, and the loan amount is disbursed within a few hours of application approval.
- Credit Score: Availing of a loan against gold does not impact the borrower’s credit score.
Conclusion
A loan against gold is a secure and attractive option for those who require cash loans. Gold loan per gram rate today is a significant factor to consider while applying for a loan against gold. It’s also essential to research and choose a trustworthy and reliable lender. Moreover, borrowers must repay the loan amount within the predetermined tenure and protect the pledged gold.
