How Does SBI Gold Loan Makes for an Affordable Borrowing Option?

The State Bank of India offers gold loan up to Rs. 20 lakhs, minimum borrowing amount being Rs. 20,000. In rural areas, you can borrow as less as Rs. 10,000. There are special rates and discounts available for farmers/agriculturists, and women. The SBI gold loan can be used for any financial requirement, as the bank does not pose any restriction on the end-purpose of the funds. But, the amount cannot be utilized for speculative and illegal purposes. The loan is most affordable given rate of interest as low as 10.25% onwards and minimal charges, fees etc.

SBI Loan against Gold Details

If you have gold coins (bank purchased) or jewelleries, you can make the best out of these by taking a loan against to cater to your monetary needs. Rather than having the gold lying idle at home or the bank locker, you can pledge it with SBI and get over any cash-shortage. Usually, people use the funds to pay for wedding expenses, travel, vacation, healthcare, education, big-ticket purchase etc. Many take the fund for business and debt consolidation as well.

You can apply for the loan either offline or online, as per convenience. Only documents required are identity and address proof. Recent passport-sized photographs, signed and filled application form are other two necessities. The funds will be disbursed only after evaluation of the gold and loan approval.

Below provided are important details and features of gold loan SBI that will help you understand why the loan is pocket-friendly.

SBI Gold Loan Features

Rate of Interest 11.15 percent (2 percent + 1 year MCLR).

SBI currently asks for interest rate for loan against gold: 2 percent above the one year MCLR (9.15% in an annum).

Lowest Loan Amount Rs. 10,000 (agriculture) or Rs. 20,000 (regular customer).
Highest Loan Amount Rs. 20 lakhs depending on gold type, purity, and weight.
Gold Loan Margin It is up to25 percent minimum on the standard gold loan scheme.

It is up to 35 percenton loan against gold which is taken on bullet repayment plan.

Repayment Period The tenure is 30 months for theregular gold loan.

The tenure is 36 months for gold loan overdraft scheme.

Processing Fees on Gold Jewellery and Coin The processing fee is 0.50 percent of total loan amount disbursed, with tax applicable.
 

 

Processing Fees for Gold Jewellery (Not Hallmarked)

The processing fee is Rs. 250 with tax for loan amount less than Rs. 25,000.

The processing fee is Rs. 500 withtax and 0.5% of the approved loan amount, in case the amount higher than Rs. 25,000.

 

State Bank Gold Loan Fees and Charges

SBI unlike other financial institutions, charges only a small processing fee for the loan application. This fee depends on the gold quality and asset that is pledged with the bank. The processing fee maximum is up to Rs. 500, while GST is charged separately. Late payment fee is also small. However, it is not advisable to delay or miss the EMIs, repayments, as it will affect your credit score. If you do not pay the loan in time even after frequent reminders, there is a risk of losing the asset as the bank may then auction the gold to recover outstanding amount.

Advantages of Gold Loan by SBI

Below mentioned are the benefits of State Bank gold loan.

  • Security: The gold you keep as security with the bank, will receive complete protection against adversities, damage, theft etc. The coins/ornaments are secured in a strong vault that gets 100 percent protection and 24×7 CCTV monitoring.
  • Loan Amount: As per the weight and purity of the old, the loan amount you get can be as high as Rs. 20 lakhs. SBI will accept gold of purity between 18 carat and 24 carat.
  • Policies and Charges: State Bank of India will charge a nominal fee to process the jewel loan. The loan is one of the most budget-friendly borrowing options for you. No prepayment charges, makes the loan more affordable. Penalties on late payment if any will be informed beforehand. Thus, there is complete transparency in gold loan policies.
  • Loan Approval and Disbursal: SBI will disburse the loan amount the same day the gold valuation happens and the application gets approved. You can even get the funds on the spot.
  • Repayment Options: Loans against gold by State Bank of India is easily repayable on tenure of up to 36 months. You can choose the bullet repayment scheme. Here, you can pay the principal amount after the end of tenure. Until the tenure, you only have to pay the interest component every month, or you can also choose the regular EMI scheme.

The above-mentioned, is information on gold loan by SBI and its affordability. You can apply for the SBI gold loan on the bank’s official website or walk into the nearest bank branch to apply offline.