Availing of a gold loan is the easiest and simplest as compared to most other loans. All it requires is gold, a PAN card or Aadhaar card, and the requisite KYC (Know Your Customer) documents
Value of gold
It is impossible to get the 100% value of gold when availing of a gold loan. Depending on the lender and their gold loan policies, the value for gold may vary between 60% to 90%. Lenders look for a minimum of 18-carat purity in the value of gold but ideally prefer 22-carat purities in the gold.
Interest rates
The gold loan rate is much lower than that of personal loans although they serve the same purpose. However, different banks, NBFCs, gold jewellers, and local lenders provide different interest rates. Ideally, they range anywhere between 9% and 20% according to the lender, although on average, they range between 13% and 15%.
Gold loans are a short-term facility
Gold loans have numerous benefits when compared to other loan options. However, there is a major downside to these loans; they are short-term facilities, meaning they are short term loans. Most institutions provide a 1-year period for gold loans. Some may extend it for 2 years.
Credibility of the lender
Be sure to do a background check on the lender. Gold loans are provided not just by banking institutions but also by NBFCs, gold jewellers, and other individuals. Although most gold loan companies can be trusted
