The coronavirus has affected the finances of many. Many people have lost their jobs or have had their wages cut or delayed due to the COVID-19 pandemic. Most of them are now looking for loans and other options to deal with their financial emergencies. If you are considering taking out a loan to deal with your temporary cash flow shortage, go for gold loans instead of personal loans. Relatively low interest rates and a quick approval process often make gold loans a better alternative to personal loans.

Several banks have recently launched new gold lending programs. Lenders typically offer up to 75% of the value of gold as a loan after verifying its purity and weight.

National Bank of India offers a gold personal loan program where a client can avail a loan of up to 20 lakh. Anyone over the age of 18 is eligible to apply for the SBI Gold Personal Loan. Individuals are not required to show proof of income to avail the loan. However, it should be noted that the client must have a stable source of income to apply for the loan.

Interest rate: SBI offers an interest rate of 1.25% above the MCLR (lending rate based on the marginal cost of funds) for one year from gold personal loans. Thus, the SBI personal gold loan program will earn an interest rate of 7.75% for one year.

The lender will charge 0.50% of the loan amount and a minimum 500 (GST applicable on both) as a processing fee for gold loans.

For Realty Gold Loan, a gold lending product exclusively for SBI Housing Loan clients, the interest rate will be 7.25% per annum.

Amount of the loan: The customer can benefit from a maximum amount of 20 lakh under this gold personal loan program. The bank also offers a gold loan of 20,000 as the minimum loan amount.

Loan repayment: SBI offers several repayment options for different types of gold loans.

Gold loan: The repayment of principal and interest will begin from the month following that of disbursement. The maximum repayment period will be 36 months.

Liquid gold loan: The overdraft account with ease of transaction and monthly interest must be paid. This plan also has a repayment option of up to 36 months.

Gold loan with bullet repayment: The customer must repay this loan no later than the end of the loan or the closing of the account. The maximum term will be 12 months for the bullet repayment gold loan.

Document needed to apply for a gold loan: The process of sanctioning the loan and disbursing the amount is very simple. The following documents are required when applying for a gold loan:

– Gold loan request form with two copies of photographs.

-Proof of identity with proof of address

– Witness in case of illiterate borrowers.

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