There has been a 56% increase in gold loans in the first seven months of the current financial year, i.e. 2024-25. Sectoral bank credit deployment data released by the RBI on Friday shows that gold loans worth Rs 1,54,282 crore were distributed till October 18, 2024.

A total loan of Rs 98.8 thousand crore was distributed in the first 7 months of the financial year 2023-24. During the last financial year, a total gold loan of Rs 1,02,562 crore was distributed by banks and NBFCs. This is 50% less than the loans distributed during the first 7 months of this financial year.

Personal loans grew by 5.6% on an annual basis. At the same time, an annual growth of 12.1% was noted in the borrowing rate of banks. Credit card loans will see an increase of 9.2% during the first 7 months of this fiscal year.

Rising gold prices are behind the increase in gold loans.

According to experts, the reason for this increase in gold loans could be the rise in gold prices. Apart from this, gold loan is available easily and at low interest rate. At the same time, some analysts also view the growing demand for gold loans as a sign of financial crisis.

Keep in mind before taking a gold loan

It is important to consider several aspects before taking out a gold loan. These include the interest rate, loan-to-value ratio, processing fees, and loan repayment terms. Above all, the security of your promised gold is of utmost importance. In such a situation, you need to choose a reputed lender (i.e. gold loan company) who has a secure warehouse or locker or an insured safe.

The gold loan is a secured loan. Gold collateral reduces the financial risk of the lender. Gold loan processing takes comparatively less time. It doesn’t require a lot of paperwork. The value of your investment can increase when the price of gold increases, making a gold loan a profitable deal.

How long can you take out a loan?

Typically, you have 3 to 2 years to repay the loan. But it depends on the bank and NBFC. Like HDFC Bank, it provides loans from 3 months to two years. SBI gives up to three years. Muthoot and Manapuram provide loans for longer periods.

What is the maximum gold loan amount that can be taken?

At most, you will get a loan of Rs 90,000 against gold worth Rs 1 lakh. SBI provides gold loan up to Rs 50 lakh. They also give a loan of Rs 1500. Since these companies only give gold loans, there is no maximum limit here.

Are any documents required for a gold loan?

According to the SBI website, you will need to provide a PAN card, Aadhar and 2 passport formats. Apart from this, proof of address must also be provided.

Does this take your credit score into account?

Gold loan is a type of secured loan. This is why your credit score doesn’t matter. You get this loan easily and at a lower interest rate than a personal loan.

How to repay the loan?

Banks or NBFCs give you many options to repay the loan amount and interest, you can choose any one as per your requirement. You can pay in Equated Monthly Installments (EMI). Apart from this, you can pay the interest during the lump sum payment of principal. This is called bullet repayment, and under this, banks charge interest on a monthly basis.

What will happen to your gold if you don’t repay the loan?

If you fail to repay the loan on time, the loan company has the right to sell your gold. Apart from this, if the price of gold falls, the lender may also ask you to pledge additional gold. Taking a gold loan is only appropriate when you need money for a short period of time. It wouldn’t be fair not to use them for big expenses like buying a house.

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ATM type card to withdraw PF, also considering increasing employee contribution by 12%

The central government is gearing up for major changes in the Employees’ Provident Fund Organization (EPFO). According to sources, as per the draft of EPFO ​​3.0, it is currently being considered to allow employees to withdraw PF funds directly from ATMs.

It is believed that this facility can be launched from June next year, but only a fixed amount can be withdrawn through it. This means that the employee will be able to withdraw money in case of emergency, but even after retirement, a sufficient amount will remain in the account.