Find Out the Gold Loan Limit in India and Its Eligibility Criteria
Gone are the days when gold was exclusively a luxury possession restricted to a select few economic groups. It is among the most sought-after commodities, being extensively purchased and traded due to its soaring prices. In India, gold is consumed in various forms, such as gold bars, jewelry, and even coins, carrying aesthetic, cultural, and economic significance.
Currently, there has been a notable increase in inquiries regarding gold loans, with more consumers seeking to convert their gold ornaments into cash during emergencies. Numerous gold financing companies now offer services to hold gold ornaments in exchange for loans or returns securely.
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Factors Affecting the Value of Gold Loans in India
The loan amountsDue to the substantial market value of gold, acquiring a larger loan becomes more accessible. According to the current regulations set by the Reserve Bank of India (RBI), most lenders provide loans up to 75% of the overall value of the gold you pledge. Esteemed lenders consider factors such as the loan amount and the repayment frequency of your installments to determine the interest using a maximum and minimum gold loan calculator.
The Market Price of Gold
In India, the interest rate for gold loans is influenced by the market value of gold. The value of the gold items you pledge as collateral will also be high, when the market price of gold is high. The value of the pledged gold items determines the overall loan amount you can receive. Typically, lenders offer loans ranging from 60% to 90% of the total market value of your gold. You can use the maximum and minimum gold loan calculator too.
In cases where the value of the pledged gold is high, lenders are more inclined to offer a low interest rate because of the reduced risk involved. However, if you become unable to make the Equated Monthly Instalments (EMIs) for any reason, the lender has the option to recover the remaining amount by selling or auctioning the pledged gold items.
Credit ScoreYour creditworthiness is reflected in your credit score, also known as your CIBIL score. A favourable credit score signifies that you have consistently made timely repayments without any defaults. Lenders are inclined to offer lower interest rates on gold loans to individuals with higher credit scores. Conversely, a lower CIBIL score results in higher interest rates being charged by lenders.
The Minimum and Maximum Gold Loan AmountsThe maximum and minimum gold loan limit in India granted by different Indian banks may be seen in the table below.
|Bank / NBFC||Minimum Amount||Maximum Amount|
|HDFC Bank||Rs 10,000||75% of the value of gold put as collateral|
|ICICI Bank||Rs 10,000||75% of the value of gold put as collateral|
|Yes Bank||Rs 10,000||75% of the value of gold put as collateral|
|Mannapuram Finance||Rs 3,000||75% of the value of gold put as collateral|
|Muthoot Finance||Rs 3,000||75% of the value of gold put as collateral|
|SBI Bank||Rs20,000||75% of the value of gold put as collateral|
|Axis Bank||Rs 10,000||75% of the value of gold put as collateral|
|IIFL Finance||Rs 3,000||75% of the value of gold put as collateral|
Gold Loan Eligibility Criteria
A gold loan can serve as a crucial lifeline during times of crisis. However, to qualify for a gold loan, individuals must fulfill the standard eligibility criteria followed by most lenders. The eligibility criteria are as follows:
- The minimum age for applying for a gold loan starts at 18 years, and loans can be obtained up to the applicant's age of 70.
- Individuals who can apply for a gold loan include salaried employees, self-employed business owners, farmers, entrepreneurs, students, homemakers, and pension holders.
- The gold used as collateral should be of good quality, either 18-22 karats or 24 karats if it’s a gold coin. Most organizations only accept gold jewelry as collateral for a loan.
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If you possess a gold item that can be pledged, gold loans offer a convenient and expeditious method of obtaining a loan. However, it is crucial to carefully assess the maximum and minimum gold loan limit in India provided by reliable lenders and select wisely. Gold loans can be utilized for various purposes. It is essential to ensure timely repayment of your dues to avoid incurring overdue charges. Remember that failure to repay your dues may result in the forfeiture of your pledged gold, so it is imperative to evaluate your circumstances accordingly.