The gold market has grown from an exquisite metal to create stunning jewellery to become an investment tool that is extremely sought-after in India. Moreover, when you need cash urgently for business needs, unplanned expenses, or medical emergencies, you could take out an Gold Loan to meet your needs o your own. So, how does the Gold Loan work? Let’s discover.

Gold Loans - How it Works
Secured loans
The bank will take your gold as collateral during the duration of the Gold Loan. Banks or gold loan companies charge an interest rate that is paid off when you pay the loan in full and the bank has returned your jewellery. Browse around this website to discover a full article about gold loan.

Gold is accepted in various forms.
Another crucial thing to know about the way Gold Loan works is the kind of gold that is accepted by banks. Gold jewelry is not accepted by the majority of banks. The purity of the gold that is used as collateral should be around 18K to 22K.

Ratio Maximum Loan to Value that banks offer
Many banks provide Gold Loans at a loan to value ratio of 75% on gold. In other words, if you end up mortgaging gold worth Rs 100,000; the maximum loan amount you can obtain is 75,000.

Gold evaluation as well as loan sanction procedure
The evaluation and sanctioning of the Gold Loan are important aspects to take into consideration. The bank or gold loan company analyzes the collateral provided by the gold, after which it determines the maximum loan amount you are eligible for, as well as the interest rate charged to it. You, as the borrower can choose the repayment period for your loan that is between 6 and 24 months. With Augmont Gold Loan Company, you can take out a Gold Loan in less than a hour.

What are the benefits of a gold loan?

Some of the key benefits of obtaining a loan against gold include:

Reasonable interest rates and minimal processing fees
The documentation is lacking
The foreclosure costs for loans are not excessive or even absent
Flexible repayment terms
High LTV ratio
Different loan repayment options
Can you safely get a gold-backed loan?

Gold loans are regarded as an investment choice that is safe. Although physical gold might not be worth much or even have a very low yield, borrowers who take out gold loans can use the funds to pay for different expenses.

Are gold loans more beneficial than personal loans?
A gold loan could be an alternative to a personal loan , if the borrower pays back the loan over shorter time. They also have lower interest rates. However the personal loan is preferentially used by borrowers because of a longer term and a larger loan amounts. Borrowers have the option of choosing between these two options based on their financial situation and individual preferences.

What can I do to obtain a loan against gold?
It is simple to obtain an gold loan from a financial institution either on the internet if services are offered in offline. Online applications can be submitted on the official site of the lending institution or bank.