What is the method of pledging gold in order to guarantee a high loan amount?
Keywords: gold loan in mumbai, how to apply for gold loan.
Meta Description: The value of the loan sanctioned is determined by how pure, how much it weighs and its market price. Read on to find out more about how you can secure a high-value gold loan.
A long list of requirements including having a good CIBIL score and a satisfactory disposable monthly income among others is what it takes for a high-value loans. Furthermore, from the beginning till reaching approval stage might also be time consuming.
However, if you have poor credit or are not working right now, this becomes impossible. In such situations, the idle gold lying in your bank locker can bail you out if there is an urgent need for cash. It enables one to get cheaper gold loans with low interest rates and shorter processing periods in Mumbai or any other city of India.
Though banks and NBFCs offer gold loans as popular lending products what if I wish to borrow huge sum against these assets? Yes! We will look at two things below; borrowing maximum amount via this type of product and understanding how to apply for a Gold Loan.
What Should I Check When In Need Of A High-Value Gold Loan?
Check LTV Ratio
Firstly, don’t expect that you would be granted gold loans which are worth their market values according to the lender’s terms. You cannot get 100% finance against pledged collateral in any form of lending facility.The lender determines the total maximum amount he/she may allow for through this ratio called ‘Loan-to-Value or LTV’.
As per RBI guidelines it currently stands at 75%. However different banks have different policies regarding LTV ratios. For example, let’s say that you gave them a security valued at Rs 10 lakhs and they give you an LTV rate at sixty percent (60%) then automatically you will be eligible for Rs 6 lakhs. If another lender comes to you with an offer of 80 % LTV ratio, then you can get a loan of up to Rs 8 lakh against the pledged item.
Consider Gold Purity
The value of gold loan against ornaments in mumbai or any other city is determined by its purity. The purity of gold is measured in Karats and most lenders accept only gold items that are above 18K.
Gold makes the alloy used in making jewelry. Most of these alloys have impurities like copper, zinc and cadmium when they are formed into below eighteen karat pieces. Therefore, this means that their values decline along with the gold’s purity. As such, pledging 22K or 24K ornaments that have less impurities would increase chances to secure high-value loans.
Weigh Your Gold
This is because; how much your gold weighs determines how much money they lend you. Consequently when applying for a high valued golden credit, one needs more grams worth of it as collateral.He must possess at least ten grams of his metal on order to take out a loan on them, while banks will not approve lent funds unless borrower’s coins weigh more than fifty grams each.
Besides, there is a special method used for weighing your golden jewels. Thus if there are any precious stones on those ones which are mounted, their weight should be deducted from their actual mass as well as added up together with the quantity of pure gold used in fabricating them too.Currently therefore , lone may be approved on this weight statement .
Check Per-Gram Gold Price
Gold prices in India are influenced by both internal and external factors. The RBI has instructed lenders to use the average gold rate per gram of the last 30 days for valuation since gold prices change daily.
Procedure for Gold Loan Application in Mumbai
If you have been wondering how to apply for a gold loan, do not worry because it is quite simple. Below is how you can get a loan against gold in Mumbai and other Indian cities;
Step 1: Fill-Up an Application Form and Submit your Documents
In order to apply for a gold loan, one needs to first compare and choose from banks and NBFCs that provide this product. After that you can proceed to the lender’s website where you can find online application form for a gold loan.
Thereafter, you must complete short e-KYC process including uploading basic KYC documents like Aadhaar Card, PAN Card, address proof, photographs etc. Alternatively, visit the nearest office of the lender and complete the procedure physically.
Step 2: Evaluation of your Articles
Once you do this initial step then wait until you receive a call from their offices. The next move will be assigning executives who will be evaluating your application as soon as possible. You might therefore need to go with those articles of yours up to physical branch office based on the lender you are dealing with whereas others offer such services at home.
Step 3: Get the Funds in your Account
Through this evaluation process, it checks your jewelry purity , fineness , weight & current market value . Most lenders enable instant evaluations & disbursals. After signing agreement related with lending money against gold with them till date; they shall keep all purchased ornaments safely before making remittance into debtor bank account.
Securing High-Value Gold Loan
Now that we have known how to apply for a gold loan, we should not find it difficult securing one . As high-value assets , yellow metal makes lenders confident . The high intrinsic value of this precious yellow metal coupled with its historical high prices make it possible to have a high-value loan granted.
However , when you pledge this asset ensure that you only go for reputable and established lenders like banks or NBFCs. This will keep the asset safe until you can pay off the EMI amounts and get it back. It is dangerous to use such assets as collateral when borrowing from local moneylenders because your loan value shall be reduced besides posing a threat to the safety of this property .
