Liquid Gold: Transforming Your Assets into Cash
Liquid Gold – Gold loans allow you to unlock the latent value of idle household gold jewelry and coins to get convenient access to liquid cash to achieve goals and dreams and overcome cash crunches.
Read on to understand how gold loans enable the transformation of physical gold assets into instant usable financing conveniently while retaining precious items.
Why Gold Loans?
Critical reasons for making gold loans popular as financing instruments:
- Growing Financing Needs Amidst Rising Gold Prices
- Urgency to Arrange Substantial Funds with Minimal Documentation
- Preserving Emotional Value of Precious Gold Items
- Unlocking Dormant Value to Get Larger Loans Quickly
- Convenience of Metal Collateralization with up to 80% LTV
Turns idle gold from liability into opportunity through monetization without relinquishing ownership, thereby extracting optimal value in need.
Who Can Apply?
Owing to essential eligibility criteria, gold loans provide universal accessibility:
- Professionals: For advancing business/practice investments
- Salaried Individuals: Important personal or family funding needs
- SMEs & Traders: Ease working capital and inventory acquisition
- Agriculturists: Purchase equipment and inputs to enhance productivity
- Senior Citizens: Supplement pension to maintain lifestyle
If you own adequate gold and need financing, you can qualify conveniently.
Where Can You Get Gold Loans?
Many banks and NBFCs provide dedicated gold loan schemes. Some major options:
- Public Sector Banks – SBI, Bank of India
- Private Banks – ICICI, HDFC, Yes Bank
- Leading Gold Loan NBFCs – Muthoot Finance, Manappuram Finance
Evaluate player comparison on interest rates and terms before applying.
Maximum Loan Amount Determination
Key factors influencing gold loan quantum offered:
- Total net weight of your gold articles upon removing stones
- Purity levels and corresponding current market gold value
- The maximum loan-to-value percentage the lender permits
With benign LTV ratios around 75-80% nowadays, sizeable loan amounts can get unlocked based on the dormant value preserved domestically.
Step-By-Step Application Process
Indicative application process workflow:
Step 1 – Visit the branch with gold items and KYC documents
Step 2 – Gold evaluation for purity and derive market price
Step 3 – Submission of application form with personal/financial details
Step 4 – Loan amount approval based on LTV and KYC
Step 5 – Safe storage of assets, issuance of certificates
Step 6 – Direct disbursal into bank account fast
Minimal documentation and evaluative procedures before cash gets credited conveniently into your account.
Interest Rate and Other Charges
While the interest rate is the primary cost, additional charges include:
- Interest Rate – 7% p.a. onwards basis lender policy
- Processing Fee – Up to 2% of the loan amount
- Foreclosure Charges – Generally nil across lenders
- Penal Interest Rates – Only if repayment delays happen
Overall, additional costs are limited, making it economical.
Offerings and Repayment Facilities
Some unique features associated with gold loans are:
- Quantum of Loan: Meet significant unexpected and planned expenses
- Tenure Options: 12 months to 24 months repayment term
- Nil Foreclosure Penalty: Early closure possible without charges
- Bullet Repayment Option: Interest-only payouts with principal at maturity
A suite of offerings providing flexibility to align with applicant requirements.
Returning the Gold Ornaments
On full and final settlement, below is the procedure:
Step 1 – Notify the branch staff about loan closure
Step 2 – Pay any residual interest amount due
Step 3 – Receive applicable ownership certificates
Step 4 – The same gold articles get returned within 2-3 working days
Streamlined article release post closure of dues.
The Key Advantages Summarized
The following merits make gold loans the preferred financing means:
- Quick loan with minimal KYC documentation
- Using assets for borrowing while retaining emotional value
- Unlocking dormant value results in more extensive, cheaper borrowings
- Most affordable source of funds with low-interest cost
- Foreclosure without financial penalties
Empower financing needs without relinquishing precious family assets.
Maximizing Benefits of Gold Loan
- Assess requirements judiciously; avoid over-borrowing
- Compare interest rate and fee structures across lenders
- Compute suitable loan tenure aligned to repayment capacity
- Regularly track and ensure no repayment defaults
- Prepay wherever possible to reduce the interest burden
Follow prudent practices to tap the innovative financing solution towards wealth creation.
Conclusion
Gold loans swiftly provide access to substantial funds against monetizing relatively idle tangible assets.
Process convenience, sizeable quantum, and flexibility prove advantageous for urgent and extensive borrowing requirements. Use prudently assessing requirements and repayment capacity upfront.
Can pave the path to prosperity by becoming liquid gold towards achieving life’s responsibilities and aspirations!
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