In recent years, a gold loan has been the most popular alternative for individuals in need of a fast financial fix. If you want a simple gold loan approval, you must first determine your gold loan eligibility. You may use this information to figure out how much interest you’ll have to pay on your gold loan each month if you qualify for one.
Presently, gold loans are the most convenient option to maintain financial abilities with affordable EMIs. Certain factors are the key to getting gold loans with reasonable interest rates. The loan eligibilities include the total weight of the gold with its purity per carat. Documentation and financial document with the age of the applicant are some other factors that affect the eligibility of a gold loan. All these factors undergo a keen inspection, after which the principal amount of loan generates with the applicable interest rate. Sometimes this interest rate may change with the variation of banks and share market concerning the prices of gold.
To get an early evaluation of the maximum loan amount possible, a person might use the Gold Loan Eligibility Calculator, a remarkable online tool. To use this tool, you must first input the weight of your gold—the greater the weight of your gold, the greater the loan amount. Please keep in mind that the weight of your gold chain will be included, not the weight of any other jewellery you may be wearing.
Factors That Affect Your Gold Loan Eligibility
When you know more about these variables, you can make an informed decision about a gold loan.
Weight of Your Gold Jewellery
This is the first and most critical aspect in determining whether or not you qualify for a gold loan. The total weight of your gold determines the gold loan amount from any lender that offers a gold loan.
If you want a larger loan amount, you must have a greater total weight. 90% of the gold’s full worth may be used as collateral for a loan. In other words, the price of gold is precisely proportional to the weight of the metal itself. It’s easy to understand the connection between the two and how the total gold weight affects your ability to borrow more money.
When estimating the total weight of your gold decorations, you must not add the weight of other items such as stones, jewels, diamonds, and so forth. It’s just the gold content of your jewellery that will be considered.
The Purity of Your Gold
Banks and NBFC’s always verify the gold’s purity before approving a loan. You already know that you can receive a gold loan against your gold jewellery and bank-minted gold coins. Carats are used to measure the purity of your gold. The more pure your gold is, the more money you can borrow.
The loan amount is determined by the gold’s current market value, which fluctuates constantly. Before approving your loan, banks or NBFCs do a thorough evaluation of your gold jewellery, including a check on its purity. They use this appraisal to determine the gold loan rate. The quality of the gold must be taken into consideration when selecting a gold loan lender.
The lender uses your age to ensure that you have enough working years to repay the debt if you default. Generally, salary prospects between the ages of 23 and 58 are favoured by financial institutions in most cases.
Without exception, the age range for self-employed and non-professional persons is from 28 to 65 years old, with no upper limit. People that fall into this category are self-employed, and as a result, they may continue working long into their sixties. This has resulted in a maximum age limit of just 65 years of age.
If you want to receive immediate approval for this secured Gold loan, the following are the set of documents required for a gold loan:
- PAN card
- Aadhaar card
- Voter ID card
- Driving license
- Government-issued photo ID card
- Defence ID card
- Aadhaar card
- Ration card
- Bank account statement
- Voter ID card
- Any utility bill (electricity bill/ water bill/ telephone bill not older than 3 months)
- Letter from any authorized person
Per Gram Rate and LTV
When checking the current market pricing of 22-carat gold, making a gold loan application is critical before applying for gold. A simple calculation may be made once you know the current value of one gram of gold.
Loan-to-value (LTV) is the maximum amount of money that may be borrowed depending on the value of the gold. The Reserve Bank of India sets the usual maximum LTV on gold in India at 75 percent. To obtain the greatest deal on an online gold loan, seek larger loan-to-value ratios (LTV) and lower interest rates.
Before applying, you may boost your gold loan eligibility by thoroughly reading and understanding these conditions. Loan applicants may also use these criteria to negotiate conditions with the bank. For example, if your monthly earnings or credit score is high, but you don’t have many responsibilities, you might ask for a favourable interest rate.