A gold loan is a loan that is secured in nature and given against gold jewellery or ornaments. The State Bank of India is a bank that offers gold loans to those who are 18 years of age and above. The bank is one of the largest providers of loans against gold in India and applies minimal interest rate for the same. The SBI gold loan is accessible to every common man who has some amount of gold with him/her. Minimum quantity of gold jewellery for the loan is 15 grams while it is 50 grams maximum for gold coins purchased from a reputed bank.
Below given are important features of gold loan SBI, which you must know.
1. Multipurpose Loan and Comfortable Tenure
A gold loan by the State Bank of India can be utilized for a number of personal expenses other than those for speculative reasons or illegal acts. People usually take this loan to meet expenses for their travel, vacation, big-ticket purchase, wedding, debt consolidation, medical treatment, education etc. You can get anywhere between Rs. 20,000 and Rs. 20 lakhs as loan depending on the gold purity and weight.
The bank may reject the loan application of a person who has had defaulted at past loans with SBI. The minimum tenure for a gold loan is 3 months, and maximum is 36 months. Depending on the loan amount you require, tenure will be decided.
2. Minimal Documentation and Eligibility Criteria
For a loan against gold with State Bank, you have to submit both Aadhar card and PAN card as identity and residence proof. If your Aadhar card displays another address than the local one, you will be required to submit a local residence proof in form of rental agreement, utility bill etc. You do not have to provide proof of income, employment, income tax, credit report etc.
Only if the loan amount is high, a credit check will be run, but not otherwise. Submit 2 to 3 passport-sized photographs and above-given documents with filled and duly signed application form to the bank, for processing the loan.
3. Lowest Rate of Interest and Charges
Out of the top providers of gold loans, State Bank of India charges the lowest interest rate. Currently SBI gold loan interest rate is 10.25% for regular customers. For women and agriculturists, these rates are lower. Farmers usually get one to two percent concession in the rate of interest. If the loan is taken for agricultural purpose, then the borrower has to provide proof of farming land and activity. Charges are also low. Rs. 250 is the minimum processing fee for the loan. The maximum processing fee is 0.5% of the loan amount. There are no prepayment and foreclosure charges applicable.
4. Free Security for the Gold Assets
You must be concerned about the safety of the gold pledged with SBI. Is there a danger of losing the jewellery? Will you get the asset in good condition once the loan is repaid? These are some of the questions that need to be answered. Firstly, the bank assures complete security for the gold pledged, and stores the same in a strong vault, which is kept in a secured room. This room receives CCTV surveillance. The gold security comes with no fee or charge.
Triple layered security is provided to the jewellery. If you already have insurance for the gold, then you need not worry for any damages. Even if the gold is not covered by insurance, the bank takes care of the asset and returns it to you once the loan is successfully closed.
5. Flexible Repayment Options
Unlike other loans, a loan against gold has multiple repayment options. SBI offers bullet repayment standard EMI as the two options for repayment. In the former, you are allowed to pay only a part of the interest amount every month till the end of the tenure, after which you have to repay the entire principal amount. In regular EMI scheme, every month, the payment will contain a part of both principal and interest amount.
Depending on your financial situation and the loan scheme chosen, the repayment mode will be decided. Though the bank does not apply foreclosure charges, it may apply a penalty fee on late payments. Thus, you should make the payments in time to keep the cost of the loan, to bare minimum. Delaying or missing payments will also affect your credit score.
6. Concessions for Existing Customers
If you are a loyal customer of SBI, then there are higher chances of getting discounted interest rates for SBI gold loan. Existing customers with a good repayment record in the past, with the bank, can also receive better offers and special loan against gold plans from the bank. Overdraft facility could be available for members of the State Bank of India.
The above-mentioned features of State Bank of India gold loan will help you know the facts of different loan against gold schemes offered by the bank, and how to take an informed call when applying for any of these schemes.
