The advent of the Covid-19 has changed the regular mode of banking and opened the way for many online services. Nowadays, the borrowers prefer to do smart banking by applying for loans and credit cards online through lenders’ websites and mobile applications. The growing need for gold loans and the negative shades of the pandemic have driven the banks, NBFCs, and other new-age fintech providers to start doorstep gold loan services. The leading banks, including ICICI Bank, IIFL Finance, Federal Bank, gold loan NBFCs Manappuram, Indel money, and Fintech platforms like Rupeek, Ruptok, Dhandar gold, etc, provide good loans at your doorstep. Let’s see how the doorstep gold loan service operates.
Steps To Apply For A Gold Loan At Your Doorstep?
You can avail a gold loan at your doorstep by following these steps.
- To avail of a gold loan, all you need to do is to book an appointment for a doorstep gold loan service through the lender’s official website or mobile application.
- The loan manager working for the lender will visit your home to perform due diligence and gold valuation. The value of the gold is checked by considering certain measuring factors. After this process, the lending bank/NBFCs/ fintech platforms will offer you a gold loan.
- While applying for a gold loan, the lender will ask you to submit some essential documents like Aadhaar or PAN details for ID proof, an electricity bill or telephone bill for address proof, and your passport size photograph.
How Gold Valuation is Done By The Lender?
The value of gold is solely determined by its purity and the current market rate. You can avail high loan amounts for high-quality gold.To evaluate the quality of gold most lenders will maintain an in-house gold valuation team and an online valuation form on their website to aid the borrower to know the exact amount from which it is possible for them to raise a credit against the pledged gold. Here are a few points which are considered by the lender in the process of gold evaluation.
- The Loan-To-Value Ratio
The loan-to-value ratio is the mandatory aspect that is looked upon by the lender before providing a gold loan. The Reserve Bank of India has decided on the LTV rate as 90% of the gold value. For example, if the derived value of the pledged gold is Rs 5 lakhs, the lender will provide a gold loan of up to Rs. 3.75 lakhs. To calculate the gold loan amount, you can use the gold loan calculator which is available on many websites.
- Gold Karats
The quality of the gold is calculated in Karats(k), which is an important aspect that determines the final amount to be sanctioned. The gold jewelry contains alloys like copper, zinc, cadmium, and silver which represents it as 22k gold. Adding these elements will make the gold damage-resistant and the proportion of mixing these alloys will change the color of the gold jewelry. The amount financed for low carat gold will be different from the amount financed for high carat gold.
- The stones and gems fused in the jewelry
Any valuable stones or diamonds or gems which are placed in the gold jewelry are not taken into consideration while valuing the pledged gold jewelry. Furthermore, the value of gold bars and coins is higher when taking a loan against gold jewelry.
- Weight of the gold
The next factor which is taken into consideration by the lender before providing a gold loan is the weight of your pledged gold jewelry. The weight of the jewelry is estimated by noting down the difference after removing the weight of the valuable stone, diamonds or gems, or any other attachments included in the jewelry that is kept as collateral. If the pledged gold weighs more after removing the attachments, you can easily get higher credit for your gold jewelry. However, at least 10 gm of gold is necessary for jewelry to be accepted as collateral.
How Much Amount You Can Get For Pledged Gold?
The loan amount for your pledged gold will vary from one company to another. For example, if you want to apply for a gold loan at the doorstep service from the Federal Bank, the minimum amount is Rs 50,000 and the maximum amount you can get is Rs 1crore. If you choose fintech providers like Dhandar Gold, you can get a gold loan between Rs 25,000 to 75 lakhs. Also, the tenure for your gold loan will differ from lender to lender.
How Interest Rate Is Charged For A Gold Loan?
The interest charged on the gold loan varies with the financial institutions. For example, if you want to apply for a gold loan from fintech company Rupeek, the interest rates are 0.49% for each month (5.88% per annum) if you pay interest once in 30 days, 1.23% per month (14.76% per annum) if you pay interest once in 60 days and 1.65% per month (19.8% per annum) if you pay only at the end of tenure. Likewise, the interest rate of IIFL Finance starts from 6.48% per month.
How is The Pledged Gold Safeguarded?
Banks and NBFCs safeguard the pledged gold jewelry by storing them in a secured locker under security and surveillance. The new-age Fintech providers store the pledged gold in their partner bank’s locker. The growing fintech lenders like Rupeek and Dhandar fully insure the gold with New India Assurance against any gold theft or accident during transit from your doorstep to the bank locker. These lenders will provide insurance to the borrowers and pay the premium.
List of Best Bank & NBFCs to Avail of a gold loan
| Banks offering gold loan | Loan Amount | Interest rate |
| Bank of Baroda | Loan Up to Rs.25 lakh | 8.75% p.a. |
| IIFL | Rs.3,000 onwards | 9.24% p.a. onwards |
| Federal Bank | Rs.1,000 to Rs.1.5 crore | 8.50% onwards |
| Axis Bank | Rs.25,001 to Rs.25 lakh | 12.50% p.a. onwards |
| Manappuram Finance | Rs.1,000 to Rs.1.5 crore | 9.90% p.a. onwards |
| Muthoot Finance | Rs 1,500 – no limit | 12% p.a. onwards |
| ICICI Bank | Rs.10,000 to Rs.1 crore | 11% p.a. onwards |
| HDFC Bank | Rs.25,000 onwards For the rural area the loan amount starts from Rs 10,000 | 9.90% onwards |
| Canara Bank | Rs.5,000 to Rs.20 lakh | 7.65% p.a. onwards |
| SBI | Rs.20,000 to Rs.50 lakh | 7.50% p.a. onwards |
Conclusion
You can easily avail a gold loan at your doorstep by following the above steps. The interest period of your loan will differ according to the loan amount against pledged gold, quality of gold, and tenure. To repay the loan amount and interest, you can use the lending institution’s app or website. The lender accepts different payment modes like debit cards, UPI, net banking, and money transfer ( RTGS, NEFT, and IMPS) facilities. After the repayment of your gold loan, the lender hands over the pledged gold to your doorstep.
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