How Does Gold Loan Work?

How Gold Loan Works?

Recently, private sector banks of India have entered into the highly un organized market, The market of loan against gold (Gold Loan). Yes, HDFC, SBI and ICICI Bank have entered into this highly un organized market.

So How Gold Loan Works? -

Well, once you decide to borrow money against your gold, you can simply walk to your nearest Bank branch. You can borrow loan against Gold Bars, jewellery, Gold ETF or any other form of Gold. You just fill up the loan application and the amount of loan you want to take.

Usually the bank will give you up to the 80% loan of the gold price. The Best part about getting this loan is that, No Income proof is requires. Because here you are putting a Gold, the most precious asset as a security so NO Income proofs required. Even if you come from low income category, you can get this loan.

Within few hours, the bank will process your application and open a Loan account in name of you. You will be charged the interest rate only on the amount that you withdraw from the loan account.

You have to check the interest rate table for availing a gold loan from the websites of the bank.

Banks and Financial institutes in India are entering into this market because they know that, Indian people have an attachment with gold and they can’t afford to default on a loan against gold. And more over, taking a loan against gold is a family decision and not the individual decision in Indian families.