Ever been in a financial crunch where your money was temporarily stuck and you required some cash urgently? If you have been in such a situation, you would have come across three main options available: loan against property, gold loan and personal loan, apart from borrowing from family or friends. The first two being secured loans (require property or gold as collateral), feature a lower interest rate than the unsecured option i.e. personal loan. Among these options, gold loans are definitely a preferred option if you are looking to minimize the processing time and maximize your repayment flexibility.
To apply for a gold loan, all you need is collateral in the form of gold ornaments or gold coins (coins are only accepted by banks) and you can avail up to 80% of the value of the gold ornaments/coins as the loan amount. Apart from leading public and private sector banks, many Non Banking Financial Companies (NBFCs) also offer gold loans and they have shorter loan processing times and often charge no fees for processing a gold loan. In the following sections we will discuss four gold loan options you can avail from leading NBFCs.
Bajaj Finserv
The gold loan provided by Bajaj Finserv is one of the few that can be availed at your doorstep. In select regions, the company sends out an evaluator to your home with a carat meter to check the purity of the ornaments that you wish to pledge. You can avail this gold loan whether you are salaried or self employed.
Manappuram Finance Limited
Considered to be one of the most popular gold loan providers, the company charges interest only on the period for which you availed the loan and the maximum loan amount available is Rs. 1 crore. The company determines the loan amount based on the weight, purity and market value of the jewellery pledged.
Muthoot Finance
Muthoot Finance ranks among the top gold loan providers in the country. With numerous outlets across India and attractive interest rates, you may decide to go for this option taking advantage of their minimal documentation requirements and extremely short processing times.
India Infoline Finance Limited
India Infoline Finance Limited (IIFL) offers you gold loans that amount up to 75% of the market value of the gold pledged. Currently only gold ornaments of purity equivalent to 18 carat or above are accepted as collateral by the company.
Following is a comparison of the above gold loan offers across some key criteria. As the interest rates and other features of gold loans are subject to change based on RBI directives, log on to Paisabazaar to get the updated information to compare and select the best gold loan for you.
Table1: Comparison of gold loans provided by Bajaj Finserv, Manappuram, Muthoot and India Infoline
|
Comparison Criteria |
Bajaj Finserv |
Manappuram |
Muthoot |
India Infoline |
|
Eligibility |
Between 21 and 70 years of age either self-employed or salaried |
Anyone above 18 years of age with gold jewellery of 18 carats or more to pledge |
Anyone above 18 years of age with gold jewellery of 18 carats or more to pledge |
Any salaried/self employed/student of 21 years or above |
|
Max/Min Loan Amount |
Rs. 25,000 to Rs. 25 Lakhs |
Up to Rs 1 crore |
Rs. 1,500 to Rs. 1 crore |
Rs. 3000 to Rs 10 Lakhs |
|
Loan Tenure |
1 month to 36 months |
Up to 12 months |
Up to 15 months |
From 3 months to 11 months |
|
Interest Rate |
8.8% onwards |
Base rate + 3% onwards |
14% onwards |
12% onwards |
|
Processing Fees |
1% of total loan amount |
Up to Rs. 200 |
Up to Rs. 500 |
Nil |
|
Prepayment charges |
Zero prepayment charges, up to six pre-payments allowed in a year |
No prepayment penalty charges |
No penalty charges for prepayment |
No prepayment penalty |
|
Late Payment Charges |
3% on outstanding principal amount from the date of default |
3% on outstanding principal amount from the date of default |
Penal interest rate depends on various factors and is printed on the loan agreement |
Penal interest rate varies on the basis of factors such as loan amount and tenure. |