Digital gold be used for loan
Since ancient times, gold has been highly treasured by many families in India. People use it not only for business and investments but also to borrow money when they urgently need it.
Today, with the rise of technology, gold can be bought digitally. Digital gold refers to a digital representation of real gold that you can buy and sell online. It’s like owning gold without needing to physically hold it. Each digital unit is backed by physical gold stored in secure places.
A digital gold loan is when you use your digital gold as security to get a loan. If you do not know where to get a loan against digital gold, you can sign up with Koshex today!
This article will focus on digi gold loans, their benefits, and how you can apply for a loan against gold.
What is a Loan Against Gold?
A gold loan is a loan where you use your gold as collateral. It means you pledge your gold as security for the loan. The great thing about a gold loan is you don’t need to go through a lot of paperwork as long as the purity of your gold is verified and you submit accurate personal details.
One of the primary advantages of a gold loan is it is quick and hassle-free. Unlike other loans, your credit history doesn’t play a significant role in getting approval. The lender feels secure, as you have enough gold to cover the loan amount.
Now that we understand what a loan against gold is, let us talk about digital gold loans and how they are different.
What is a Digital Gold Loan?
Thanks to digital technology, we now have digital gold loans. It means you can apply for a gold loan online, and the whole process, from checking your eligibility to getting the money, can be done digitally.
With digital gold loans, you don’t have to go to the lender’s office. They will send a representative to your home to value your gold and sanction the loan amount swiftly. It’s fast, easy, and keeps your information private. So, if you need money urgently and have gold to pledge, digital gold loans are a great option.
Before delving into the steps of applying for an online digital gold loan, it is essential to explore the advantages these loans offer.
Related: Beginner’s Guide To Investing In Digital Gold
Benefits of a Digital Gold Loan
Getting a digital gold loan has many benefits compared to going to a bank branch for a loan. Here are a few:
- Keep Your Privacy: You don’t have to go to the bank and show your gold in person, which means your privacy is protected. The entire process can be completed discreetly from the comfort of your home.
- Super Convenient: You don’t need to handle your gold yourself. Just give it to a representative, and they will take care of everything for you.
- Easy Process: The evaluation of your gold and the calculation of the loan amount are done smoothly. Most lenders have calculators on their websites to make it even easier.
- Less Paperwork: You only need an ID and address proof. No piles of documents are required. The process is streamlined to help you save time and effort. You may submit any of the following documents to avail of a loan against gold online:
- PAN card
- Aadhaar card
- Driving license
- Voter ID card
- Passport
- Quick Disbursal: Once your gold is checked, the loan amount is disbursed directly into your bank account within minutes. Furthermore, you can conveniently make loan repayments online, eliminating the need for physical visits to repay the loan.
Also explore: Is Buying Digital Gold A Good Investment?
How to Apply for a Digital Gold Loan?
Applying for a digital gold loan involves a straightforward process that can be done entirely online. Here’s how it works:
- Application: Firstly, you should fill out an online application form with basic personal details such as name, age, gender, address, and mobile number. After applying, a representative from the lending institution will get in touch to guide you through the next steps.
- Gold Evaluation at Home: The next step is the evaluation of gold. The lender will send a trusted executive to your home to evaluate the gold items planned to be pledged as collateral. Once the evaluation is complete, the representative will offer a loan amount, typically around 60-75% of the gold’s value.
- Quick Disbursement: Once you agree to the loan amount, the money is swiftly disbursed to your bank account. The entire process is designed to be hassle-free and efficient, ensuring prompt access to the funds.
- Secure Storage of Gold: Reputed lenders ensure the safety of the pledged gold by storing it in highly secure vaults monitored continuously. This eliminates any risk of theft or damage to valuable gold jewelry, providing you with peace of mind.
The process is quite simple, but still, there are a few things you should keep in mind before applying for a loan against gold online.
Things to Keep in Mind Before Applying for a Digital Gold Loan
- Eligibility: To be eligible for a gold loan, you must be an Indian citizen. The age requirement varies, generally from 18 to 21 years, and extends to a maximum of 70 or 75 years.
- Applicants: Gold loans are available for a diverse range of individuals, including salaried employees, self-employed business owners, farmers, entrepreneurs, students, homemakers, and pension holders.
- Types of Gold Accepted: You can use various gold items for obtaining a gold loan, such as gold jewelry coins, digital gold, and Sovereign Gold Bonds (SGBs). Loans can also be secured against 24-karat gold coins.
- Interest Rate: Since gold loans are secured by collateral, the interest rates are typically lower when compared to unsecured loans. These rates generally start at around 7% per annum.
- Loan Tenure: The duration of a gold loan typically begins from as short as 3 months and can extend up to 24-48 months, giving borrowers repayment flexibility.
- Repayment Options: Depending on the lender, you can choose different repayment methods. It includes making Equated Monthly Installments (EMIs), paying both interest and principal at the end of the loan term, or paying interest through EMIs and the principal at the end term.
- Gold Requirement: Usually, a minimum of 10-20 grams of gold is required as collateral to secure a gold loan.
Related: Digital Gold vs Physical Gold – Which is Better Investment Option
Final Words
All in all, you can use digital gold to get loans when you need money urgently. It is a convenient option with less paperwork, and you get the money quickly.
If you’re a millennial or Gen Z and want help with investments, you can sign up with Koshex. The platform offers personalized suggestions for mutual funds, digital gold, fixed deposits, and smart deposits without needing a financial planner. Start your financial journey with Koshex today!
FAQs
What is a Loan Against Gold?
A gold loan is when you use your gold as collateral to get a loan. Your gold’s purity is checked, and with accurate details, you can quickly get approved.
How does it differ from traditional loans?
Gold loans are quicker and don’t heavily rely on your credit history. As long as your gold covers the loan amount, lenders feel secure.
What’s a Digital Gold Loan?
A digital gold loan lets you apply online. Representatives come to value your gold at home, making the process convenient and private.
What are the benefits of a Digital Gold Loan?
It offers privacy, convenience, minimal paperwork, easy evaluation, and quick disbursal directly to your bank account.
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