Coronaviruses have affected the finances of many. The COVID-19 epidemic has caused many people to lose jobs or to cut or delay their salaries. Most of them are now looking for loans and other options to meet their financial emergencies. If you are planning to take a loan to manage temporary cash crisis, then opt for gold loan instead of personal loan. The relatively low interest rate and rapid approval process often make gold loans a better option than personal loans.
Many banks have recently introduced new gold loan schemes. Lenders usually offer up to 75% of the value of gold as a loan after examining the purity and weight.
State Bank of India offers personal gold loan scheme where the customer can avail a loan of up to 20 lakhs. All persons above 18 are eligible to apply for personal gold loan of SBI. Individuals are not required to produce proof of income to obtain a loan. However, it should be noted, the customer must have a stable source of income to apply for a loan.
Rate of interest: SBI offers an interest rate of 1.25% above the MCLR (marginal cost of money-based lending rate) for one year on personal gold loans. So, the interest rate of 7.75% for one year will be available in the SBI Personal Gold Loan Scheme.
Lender will charge 0.50% of the loan amount and minimum ₹500 as processing fee for Gold loan (GST applicable on both).
For realty gold loans, especially a gold loan product for SBI Housing Loan customers, the interest rate will be 7.25% pa.
Borrowed amount: Customer can avail maximum amount ₹20 lakhs under this personal gold loan scheme. Bank also gives gold loan ₹20,000 as the minimum loan amount.
Loan Payment: SBI has several repayment options for various types of gold loans.
Gold loan: The repayment of principal and interest will start from the month after the month of disbursement. The maximum repayment tenure will be 36 months.
Liquid gold loan: Overdraft account is to be served with transaction facility and monthly interest. The plan also has a repayment option of up to 36 months.
Bullet Repayment Gold Loan: The customer should give this loan over the term of the loan or before the account is closed. The maximum tenure for Bullet Repayment Gold loan will be 12 months.
Documents required to apply for Gold loan: The process of sanctioning loans and disbursing funds is very simple. The following documents are required when applying for a gold loan:
– Application form for Gold loan with two copies of two photographs.
– Proof of identity with address proof
– Witness letter in case of illiterate borrowers.