List of Documents Required for Eligibility of Loan Against Gold
Gold is one of the most valuable form of liquid asset present in each Indian household, even if in a meagre amount. It is an investment that most Indian households stand by, to be utilised as security during need. The ongoing pandemic has also led to an upsurge in the gold loan industry in India. This is primarily because a gold loan does not involve any elaborate paperwork and eligibility requirements. The process of approval and disbursal is also quite simple and fast. Therefore, loans against gold have become viable financing solutions to meet emergency financial crises.
A gold loan is a secured advance. Being secured in nature, there are no stringent gold loan eligibility criteria or documentation requirements. Potential borrowers can avail of it against the most basic documents like identity and residence proof.
Following is the gold loan eligibility documents required:
- Proof of identity
This list includes the following documents:
- PAN Card
- Voter ID
- Aadhaar Card
- Driving license
- Passport etc.
- Proof of residence
Following are the documents that can serve a residence proof:
- Passport
- Bank statement
- Aadhaar Card
- Ration Card
- Voter ID
- Recent electricity/telephone bill.
Apart from these, a potential borrower might need to present or submit his/her income proof along with the other documents. This will eventually help them in simplifying and accelerating the process of loan approval. Therefore, it is always recommended to go through the list of documents required carefully, as the list varies across institutions because of their policies.
You also need to know that these loans can be secured only against gold in the form of ornaments or jewellery. This is because financial institutions do not provide loans against gold bars or coins.
Eligibility criteria to avail gold loan
Apart from presenting the above-mentioned documents, individuals also need to comply with these gold loan eligibility criteria:
- The person willing to avail of the loan must be between 21 to 70 years of age.
- They must be a salaried/ self-employed individual. Individuals from all professional backgrounds are allowed to avail of gold loans.
- He/she must possess sufficient gold to seek a loan against.
Fulfilling these basic requirements can help individuals access a gold loan instantly. However, applicants must also factor in the LTV ratio before initiating their loan application.LTV ratio determines the loan amount that individuals can secure out of their collateral pledged. The Reserve Bank of India has put a 90% cap on LTVfor gold loans. The higher the value of the gold you can pledge, the greater will be the amount you can secure against it.
Benefits of gold loan
There are several notable benefits that a gold loan offers. These include:
- The processing time for loans against gold is very less as compared to other advances. Therefore, individuals oftenincline towards availing of loans against gold at the time of emergencies.
- Your credit score does not determine your eligibility or interest rates. Therefore, individualswith poor credit scores also satisfy gold loan eligibility.
- You are free to choose an EMI regime at your convenience.
- Interest at the time of repayment is very low as compared to other loans. Apart from this, the flexible repayment options allow individuals to settle the debt incurred without burdening their finances.
NBFCs like Bajaj Finserv provide flexible schemes along with convenient tenors of repayment. Thus, alongside ease of application and processing, applicants can enjoy multiple benefits against a gold loan that can make meeting emergency financial requirements a lot simpler.
Also Read : Important Points Which Affect Your Home Loan Interest Rate in India
