Need a secured loan? Now you can get more of your gold; here’s how

0

The Reserve Bank of India (RBI) announced on Thursday that lending institutions such as banks and non-bank financial corporations (NBFCs) can now lend up to 90% of the value of gold jewelry, raising the cap to 75 % previously. The RBI has increased the LTV (loan-to-value) ratio on gold loans to provide relief to borrowers looking to take gold loans to ease financial demands caused by the coronavirus crisis. Here’s what you need to know:

RBI statement on gold lending

The RBI said: “Under current guidelines, loans sanctioned by banks against pledging gold ornaments and jewelry for non-agricultural purposes should not exceed 75 percent of the value of gold ornaments and jewelry. In order to further mitigate the economic impact of the impact of the coronavirus pandemic on households, businessmen and small businesses, it was decided that the loan-to-value ratio (LTV) allowed for collateral loans of gold jewelry for non-agricultural purposes will increase from 75% to 90%.

Validity of the relaxation

According to the RBI, the easing will only be valid until March 31, 2021.

What is a gold loan?

A gold loan is a loan that you take out for gold. This is a secured loan where gold items such as gold jewelry, bullion etc. are taken as collateral by the lending bank / NBFC.

The loan is given to the borrower against this gold as collateral.

What are the advantages of opting for a gold loan?

A gold loan is similar to a personal loan in that it meets your immediate financial needs, whether it is international education, wedding expenses, medical emergency coverage, or any other purpose. staff. However, unlike a personal loan, it is a secured loan with your gold item as collateral and carries a lower interest rate.

Key Benefits:

Fast processing: Gold loans require minimal documentation, thanks to its secure nature, which leads to faster processing.

Flexibility: As there is no end use tracking, it gives you the option to use the loan for any kind of expense.

Type of secured loan: You are not required to submit to the lender any other security / collateral other than the pledged gold ornaments.

Lower interest rate: Interest rates on gold loans are lower than personal loans because gold serves as collateral.

Liquidate inactive assets: Active inactive, gold is rarely used to generate money. Therefore, gold loan is the perfect solution to raise capital and use the fund when you need the money to meet your financial needs. It is also safer in the lockers of a bank or financial institution than in your own home.

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor


Source link

Share.

About Author

Comments are closed.