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A Detailed Guide on Gold Loan and Gold EMI Calculator

IndianMoney.com Research Team | Posted On Monday, February 17,2020, 03:32 PM

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A Detailed Guide on Gold Loan and Gold EMI Calculator

 

 

Gold loans are secured loans which are pledged against gold jewelry and gold coins with various banks and financial institutions. With the introduction of bank and financial institution-backed gold loans, the process has become well organized and transparent. Gold loans are aggressively promoted across the country as they benefit both the lender and the borrower.

Another benefit of the gold loans is that they are comparatively cheaper vis-a-vis other loan types. As the collateral is furnished by the borrower, there are limited chances of default which keeps the interest rates low. However, as a borrower and one of the affected parties, it is important that you understand all the knick-knacks of this efficient loan.

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A Detailed Guide on Gold Loan and Gold EMI Calculator

Here are the Key Points on Gold Loans:

  • Gold loans are secured loans sanctioned against collateral offered by the borrower. To be eligible as collateral, the gold item must be of at least 18 carat purity or more.
  • You can get a gold loan of up to 75% value of the gold item. (LTV of 75%).

If you are furnishing gold ornaments and jewelry as collateral; then only the gold part is considered for the loan. Gems are not considered.

See Also: Gold Loan Interest Rates

Pure gold artifacts like gold coins, gold bars have higher value. Depending on your bank or financial institution and the purity of gold, you may get a loan of up to 90% of the value of gold coins and gold bars.

The interest charged on gold loans is comparatively lower compared to other loans. Gold loan rates are in the range of 10.5-12% a year.

Why Should You Opt for a Gold Loan?

A gold loan is the fastest and easiest way of procuring a loan in case of immediate requirement. As the collateral is furnished prior to getting the loan money, the process is swift with minimal documentation. Opting for a gold loan has several benefits:

  1. Fast Processing: Due to minimal documentation, the process of procuring a gold loan is real fast. The bank or NBFC can instantly lend you the money against collateral (gold) once the quality check is done.
  2. High Flexibility: You can use the gold loan for anything you please. You can use that money for your child’s education, for traveling, or buying a car or home and so on.
  3. Easy Pre-Closure: Unlike other loans where a penalty is levied on early closure of the loan amounts, you can close and settle the gold loan as and when you have the money.
  4. Low-Interest Rate: Gold loan rates are lower as compared to personal loan rates that generally start at 10% and can go up to 24% a year.
  5. Easy EMIs: Gold loans like any other loan can be paid in easy EMIs which are split across the tenure of your choice.

See Also: How Gold Loans Help You Improve Your Credit Score?

This brings us to another important point, Gold Loan calculator.

What is Gold Loan EMI Calculator?

A gold loan calculator helps get a fair estimate on the value of your gold used as collateral. The results are dependent on factors like weight, gold form, and purity in carats. Once you key in these details, a gold loan calculator gives you the amount of money you are eligible to take against your gold.

 Once you have secured the gold loan, the next step is to plan the repayment of the loan amounts. You can either pay as a lump sum or opt for the EMI route.

To calculate the EMIs in order to repay the loan, a few inputs must be keyed in the gold loan EMI calculator. Here are the desired inputs:

  • Loan amount as subscribed
  • Interest rate offered by the bank or NBFC
  • Intended tenure for loan

Depending on the current gold price, the EMI calculator furnishes the monthly EMI amounts to be paid for the given tenure in order to repay the loan.

See Also: Advantages of Gold Loan

Conclusion

Gold loan is a swift and easy way of procuring instant money at a lower rate of interest. Any Indian who is between the age of 18 to 70 years can opt for a gold loan. The gold loan can be repaid in easy EMIs over the tenure and the collateral can be freed on repayment.

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