If you're new to the concept of taking out a gold loan, you may be wondering, What is the procedure for gold loan? The process is more straightforward than you might think, but understanding the details can help ensure that you secure your loan efficiently and at the best terms.
Understanding the Procedure for Gold Loan
The first step in the gold loan process is approaching a lender, which could be a bank or a non-banking financial company (NBFC). You'll need to bring your gold ornaments or items for evaluation.
1. Gold Evaluation: The lender will assess the purity and weight of your gold. Typically, gold with a purity of 18 karats and above is accepted, though most lenders prefer 22 karats for valuation.
2. Loan Amount Calculation: Based on the evaluated gold, the lender determines the loan amount. For example, 750 gold means (which means 18 karat purity), the loan amount will be proportionate to its market value and purity.
3. Documentation: You'll need to submit basic KYC (Know Your Customer) documents such as ID proof, address proof, and sometimes income proof.
4. Approval and Disbursal: Once the gold is evaluated and documents are verified, the loan is sanctioned and disbursed, often within a few hours. The gold is kept as collateral, safely stored by the lender.
The Importance of 750 Gold
While discussing gold loans, it's crucial to understand what 750 gold means. The term "750 gold" refers to gold that is 750 parts per thousand pure, translating to 18 karat gold. While 750 gold is acceptable for loans, higher purity gold like 22 or 24 karats usually attracts a higher loan amount. Understanding this can help you estimate the loan you can get against your gold assets.