India has one of the most extensive gold stocks of 22000 tones, most of which are owned by Indian households and temples. India’s gold market is predicted to reach Rs 4.6 trillion in 2022 from an estimated Rs 3.1 trillion in 2020. This colossal growth rate is all a result of customers’ satisfaction, trust and efficiency of the gold loan in solving financial emergencies. If you own the right amount of gold and are in an urgent need of money, you can get cash for gold.
Understanding gold loans
Loan against gold is a secured loan in which the borrower pledges gold as collateral against the gold loan amount. Gold loans are disbursed quickly due to the minimum requirement of paperwork involved in the procedure, revving up the verification process. There are a lot of exciting features offered by cash for gold schemes but let us first look at the eligibility criteria that need to be met to apply for cash for gold.
Loan against gold is probably the easiest to get with minimum restrictions. They can be availed by a large section of the population with varying income levels.
Minimum age of the applicant
The individual must be at least 18 years old to apply for a gold loans.
Maximum age of the applicant
The individual must be below 75 years old to apply for a gold loans.
Criteria for the pledged gold
Gold items are found in many variants in the market based on their composition. Since pure gold, which is of 24 carats, is in the liquid form, it cannot be used for its intended purpose independently. Gold is alloyed with other metals in specific proportions to give it a solid shape. Gold items available in the market are usually found in 14 carats, 18 carats, 20 carats and 22 carats variants. Gold loans lenders only accept gold items which are in the purity range of 18 carats to 22 carats.
Avail gold loan irrespective of your credit score
CIBIL score or credit score is a three-digit score, ranging from 300-900, assigned to an individual based on his or her last six months of financial records. CIBIL score of an individual is considered as a metric to measure one’s financial stability by loan lenders. Higher the CIBIL score, more financially steady is the individual. Loan against gold is sanctioned, even to applicants with a poor CIBIL score since gold is taken as collateral against the loan for security.
Maximum eligible gold loan amount
The maximum cash for the gold for an individual depends upon the overall value of gold pledged by him or her. The price of gold is calculated using a gold loan calculator, taking the average cost of 22 carats in the last 30 days as the datum. The net weight of the gold items is first converted to 22 carats gold equivalent for finding out the net worth. After the net worth is evaluated, the maximum approved loan against gold amount is decided as per the loan to value ratio, also known as LTV ratio, set by the lender. The Reserve Bank of India has set the maximum LTV to 75% keeping in mind the fluctuation in the price of gold.