Coronavirus has affected the finances of many. Many people have lost jobs or have seen their salaries cut or delayed because of the COVID-19 pandemic. Most of them are now looking for loans and other options to meet their financial emergencies. If you are planing to take a loan to manage you temporary cash crunch, opt for gold loans instead of personal loans. Relatively low interest rates and fast approval process often make gold loan a better alternative than personal loans.
Several banks have recently launched new gold loan schemes. The lenders usually offer up to 75% of the gold's value as a loan after checking for purity and weight.
State Bank of India offers Personal Gold Loans scheme where a customer can avail a loan of up to 20 lakh. All individuals above 18 are eligible to apply for SBI's personal gold loan. Individuals are not required to submit proof of income for availing the loan. However, it must be noted, customer should have a steady source of income to apply for the loan.
Interest rate: SBI offers an interest rate of 1.25% above the MCLR (marginal cost of funds-based lending rate) for one year on personal gold loans. So, SBI Personal Gold Loan scheme will fetch an interest rate of 7.75% for a year.
The lender will charge 0.50% of the loan amount and minimum ₹500 (applicable GST on both) as processing fees for the gold loans.
For Realty Gold Loan, a gold loan product exclusively for SBI Housing Loan Customers, the interest rate will be 7.25% per annum.
Loan amount: Customer can avail a maximum amount of ₹20 lakh under this personal gold loan scheme. The bank also offers gold loan of ₹20,000 as a minimum loan amount.
Loan repayment: SBI has several repayment options for different kind of gold loans.
Gold Loan: The repayment of principal and interest will be commenced from the month following the month of disbursement. The maximum repayment tenor will be 36 months.
Liquid Gold Loan: Overdraft Account with transaction facility and monthly interest is to be served. This scheme also has a repayment option of up to 36 months.
Bullet Repayment Gold Loan: Customer should re pay this loan on or before the term of the loan or closure of account. The maximum tenor will be 12 months for Bullet Repayment Gold Loan.
Document needed to apply for a gold loan: The process of sanctioning the loan and disbursing the amount is very simple. The following documents are required while applying for a gold loan:
-Application form for gold loan with two copies of photographs.
-Proof of identity with proof of Address
-Witness letter in case of illiterate borrowers.