There has been a change in the way of applying for a loan since the Corona pandemic. Now customers are preferring to apply for loan through website or mobile application. While some banks, NBFCs and fintech lenders have launched door-step gold loan schemes. These include financial institutions including Federal Bank, ICICI Bank and IIFL Finance, gold loan NBFCs Indel Money and Manappuram, and fintech lending websites Rupeck, Rooptok, Dhandar Gold etc. that offer gold loans at your doorstep. Let’s see how it works.
How to apply – Banks, NBFCs and Fintechs can apply for a gold loan at their doorstep through the website or mobile application. For this, the lending company first books the appointment and after that their agent comes to your home and takes PAN, Aadhar, electricity bill or telephone bill as proof of identity and address. After which you are given gold loan by banks, NBFCs and fintech companies.
Let us tell you that on applying for gold loan in Federal Bank, you can get a loan of minimum 50 thousand rupees and maximum up to 1 crore rupees. On the other hand, fintech lender Dhandaar Gold offers a gold loan of a minimum of Rs 25,000 and a maximum of Rs 75 lakh. This loan is given for three to six months.
How is the value of gold determined? The gold is weighed by the lending institution and its purity is verified. The loan to value for gold loans has been limited by the RBI to 75 per cent. For example, if the value of your gold is Rs 5 lakh, you can get a gold loan up to Rs 3.75 lakh. On the other hand, gold lending institutions give loans only on gold of 18 cassettes and above standard. On the other hand, the weight of metals, stones and gems other than gold is not added to the gold loan. Also gold coins, broken gold jars and gold bars are not accepted for gold loan. Along with this, gold loan gets credited in your account within 30 minutes of approval.
Difference between taking gold loan from bank/NBFC and fintech – When you take a gold loan from a bank or NBFC, you have to take a gold loan at the rate of interest charged by them. While there are many banks associated with the fintech lender, they charge different interest depending on the purity and weight of the gold. Let us tell you that Gold Loan is a partnership of fintech lender Rupeck with Federal Bank, Karur Vysya Bank and South Indian Bank from which you can choose the cheapest rate of interest.
How much interest is to be paid on gold loan? The interest rate on gold loan varies with the financial institutions. For example, taking a gold loan from fintech firm Rupeck is 0.49 per cent per month (5.88% per annum), 1.23 per cent per month (14.76% per annum) if you pay interest within 30 days and if you pay in 60 days. Interest is paid once and 1.65 per cent per month (19.8% per annum) has to be paid.
Where is your gold kept safe? Banks and NBFCs keep the pledged gold in their secure lockers under security and surveillance. Fintech firms store gold in the lockers of partner banks. Fintech lenders like Dhandaar Gold and Rupeck offer fully insured gold with New India Assurance against theft or accident in your doorstep to bank locker movement.
In case of being unable to repay the gold loan – If you are unable to repay the gold loan on time, a penalty of up to 2 per cent per annum is levied on the lender for delayed payments. On the other hand, if you do not pay even after the reminder, the bank can confiscate and auction the pledged gold to recover the dues.