A financing mechanism whereby gold is borrowed from a bullion bank (which has
usually borrowed it from a central bank or banks), and sold into the market to raise
cash, usually to finance a gold mining operation. The metal is then repaid over
an agreed period of time.
What is Gold Loan?
Many go for this loan for short period to meet the requirement of their children’s
education, marriage and other financial problems in the family. And others think
that instead of keeping the gold idle at home or locker, loan against gold is the
best option. Moreover with the rise in gold rates the demand from companies, Banks and
Nidhi's offering such loans has raised.
Advantages of Gold Loan
Gold loan doesn’t demand any certificate to show your salary or income and even
no credit card history is required. Thus even unemployed and non working people
can go for gold loan.
Unlike any other unsecured loan, gold loan doesn’t require many papers, only few
documents such as ID proof and address proof is enough to avail for such loan.
One of the main advantages of gold loan is its low interest rates. Usually loan
over gold is provided at the interest of 12-16%
per annum and this is quite low compared to personal loans available at interest
rates of 15-26% per annum.
Gold loan is the most simple and convenient forms of loan because here all you need
to do is pledge your gold with a bank or finance company (Nidhi) and get
up-to 80% of the market value and purity of the gold as a loan.
Borrower will be given an option to pay only interest during the entire term and
at the end of the tenure you can pay complete borrowed amount in single shot,
or as Nidhi provide options for pay your princpal amount and interest both.
Green Parivar Nidhi Ltd.'s Conditions for Gold Loan:
- 1.5% interest per month as Simple Interest Calculation,
- No Guarantor required on Gold Loan,
- Gold Loan Available upto 80% of your Gold/Silver Purity,
- Interst have to pay min. 1 Month of your Loan, If Loan wearer Pre-Mature his/her Loan within 1 Month.
Charges associated with Gold Loan:
- Loan processing charge,
- Valuation Charge,
- Late payment penalty and
- Pre-payment penalty.
Advice on Gold Loans
Go for gold loan if you are confident of returning the money in time otherwise,you
will be penalized and all your pledged gold will come under the control of company.
Documents required for Gold Loan
- Identity proof such as Aadhar Card, passport, voters ID or driving license,
- Address proof such as electricity bill, ration card, telephone bill etc,
- For signature proof you need to submit your passport copy, driving license or any
other document with your sign and
- 2 passport size photographs.