What is 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.
• In rural areas Agricultural loan against gold is also available for agriculturist at very nominal rate of Interest of 7%-8%, proof of agricultural document needs to be provided
• 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 and get upto 80% of the market value 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.
• In case of gold loan processing time is very less. Usually banks take just few hours to complete the process where as in case of NBFC’s (Non Banking Financial Companies) a few minutes is enough for the same. So for immediate financial help this is the best option. 

• Loan processing charge: While some of the service providers may waiver these charges, some banks do charge a processing fee.
• Valuation Charge: These are the charges to be paid to the valuator. These charges are also specific to the service provider and those having in-house valuators do not charge any extra amount for valuation.
• Late payment penalty: Most of the service providers charge late payment penalty and this too can vary from one institution to the other.
• Pre-payment penalty: Most of the service providers do not charge a penalty for repayment before the loan tenure is over. But some may still have this charge in place.
• It is advisable to check with the loan provider before taking the loan. These charges could change the amount that you may finally receive. 

• 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 bank or finance company.
• While opting for gold loan check the interest rates in various banks and private finances. If you go for private lenders then better to go with one who has been in this business for many years.
• As far as you are not emotionally linked to your gold ornaments this is the best option. However nothing like this can help you during your difficulties and with the fall of dollars and euro many think gold is the only safe thing left. 

• Identity proof such as 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.
• 2 passport size photographs.