A gold loan involves pledging one’s gold ornaments and gold coins with a bank to borrow funds. It is one of the most convenient financing options. This is because of the fact that anyone can borrow it without being subjected to any income or any occupation. Thereby, it is easily processed and easy to avail. A gold loan is much popular in countries like India, where it is believed good to purchase gold for reasons like status and cultural connections. Due to this, there are a number of gold loan lenders in the market. Out of all, SBI is one of the leading gold loan lenders. One of the approaches about SBI Gold Loan is that we can use it for any purpose, be it for weddings, a dream travel, education etc. There is also an option of an SBI agricultural loan available which makes SBI even more attractive.
Some trends about SBI Gold loan are listed below:
Loan Amount and margin:
A SBI gold amount can be borrowed for a maximum loan amount of Rs 20 lakhs. The minimum loan amount for it is, however, Rs 20,000. Further, the margin set by SBI on gold loans and liquid gold loans is 25%, and for bullet repayment of gold loans, it is 35%.
SBI gold loans are processed only after the proper verification of the gold quantity and quality. Due to this dual process verification, the bank charges processing fee on gold loan, which is 0.50% of the gold loan amount. Further, the processing fee also involves the application of GST, which is a minimum amount of Rs 500.
The interest rate on gold loans:
SBI gold loan interest rates are comparative to other lenders. The interest rates on SBI gold loans is linked to the bank’s one-year Marginal cost of lending rate, which currently is 7.40%. The SBI gold loan interest rate is 1.25% above the one-year MCLR. As per the trends, the current SBI gold loan interest rate is 8.65%. The bank may even charge the gold appraiser charge in the SBI gold loan.
Gold loan repayment:
SBI gold loan involves loan repayment through three repayment modes. The gold loan repayment mode includes repayment of principal and interest rate from the month that succeeds the disbursement of the loan. The liquid gold loan facility allows an overdraft facility with the transactions, and thereby the interest is served. Further, the bullet repayment gold loan allows closure of gold loan before the term of the loan. Further, the maximum gold loan repayment tenure for a gold loan and liquid gold loan methods is 36 months, and for bullet repayment gold loan it is 12 months.
Eligibility on gold loans:
The eligibility for SBI gold is easy to be maintained. For this, the applicants need to be of 18 years of age and above. Further, all individuals can avail the gold loan, including the pensioners, or even the bank’s employees. Further, no income proofs will be required for the same.
Gold loan documentation
: The SBI gold loan documentation requirement is minimal in comparison to other loans. To apply for an SBI gold loan one requires gold loan application forms and the applicant’s two passport size photographs. Further, one is required to submit identity and address proof. However, if the borrower is illiterate one requires a witness letter. Further, at the time of disbursement, the gold loan borrower requires DP note and DP note delivery letter, along with the arrangement letter and the gold ornaments take away the letter.
SBI Loan is a government based scheme and no doubt it is associated with a number of benefits. However, let us look at the current trend scenario.
SBI Loan and the Current Pandemic
As per the view about the economist and the financial advisers we need to work on common grounds. The entire economy is shaken. Banks are going down. Yet, saving, lending and borrowing is still a need of an hour during these tough times. As per the new guidelines, SBi has
given a three month relief to its borrowers. The rate of interest will also be kept low. Due to the current trend, there has been drastic fall in incomes affecting the business and individuals at a larger level. Due to this, both banks and people need to support one another. RBI has announced a moratorium in which all the borrowers can extend the pay of EMI. Also, no late payment fee shall be charged.
Forms of Gold
SBI Bank accepts the gold ornaments in a different form and shapes like a gold bangle, gold rings and gold necklaces. Also, the quantity, quality and the overall value of gold matters.
The gold asset should be around 18 carats to 22 Carat. Higher would be the value; higher will be the returns. Duly check and study everything about your gold. The original and pure piece is precise, which would be accepted.
Also, make sure that all your past dues are cleared. Keep all your documents ready. After the verification is made, the loan will be sanctioned. The best is that it is a secured form of a loan. Gold can be used as an asset—no need for cibil score and other formalities. You can obtain a loan quickly without much of a hassle. Locate your nearby branch and apply for an online SBI Gold Loan today. Within the span and passage, you can increase the cibil score by making regular payments. With the advent of digitalization, there is no need of going and having long rounds to the banks. People can check all the updates about approval , pending , interest rate and other details through the online portal.
Thus, on a concluding note, it must be known that SBi is one of the most popular gold loans. However, the popularity of the bank for gold loan is the SBI gold loan trends that make it feasible for the gold loan borrowers to arrange for funds in the times of needs.