A gold loan is a loan that is easily available and being a secured loan, the interest rate on it is much lower than that of a personal loan. For this reason, its trend has seen a significant increase in recent times. In India, gold has been passed down from generation to generation. For this reason, a large number of people do not have documents of ownership of their gold. In such a situation, the question arises in people’s minds that whether it is necessary to prove ownership of gold while taking a gold loan or not?
What is the principle of RBI?
According to the RBI website, if a person takes a gold loan for more than 20 grams of gold at a time or jointly, he must prove ownership of the gold. If the gold loan is taken for less than 20 grams of gold, no ownership receipt is required. In such a situation, any person can borrow gold by pledging less than 20 grams of gold without proving ownership.
Advantages of taking gold loan
- Gold loans require less paperwork as compared to other loans. Gold is pledged in it. Because of this, documents are only required to prove identity and address.
- No need to show proof of income.
- In this you have the option to pay back the money in installments or to make a lump sum payment to settle the loan.
- Gold loan has lower interest rate as compared to personal loan. Due to this you can save a lot by taking gold loan.
- Gold loan processing fee is quite low. Many banks provide gold loans at zero processing fees.
- Being a secured loan, it does not require a CIBIL score.
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