Looking to turn your dreams into reality? Here’s why you should bet on your gold

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Gold as an investment is worthy of its name. Even when it is simply sitting for years in the lockers and almirahs, it undergoes capital appreciation. Naturally, those who understand the worth of this asset utilise it as a smart investment. They make use of their idle jewellery or ornaments and fund their dreams by availing a loan against it. A gold loan refers to getting a monetary loan in return for pledging your gold ornaments and jewellery to a bank or an NBFC.
A gold loan is one of the simplest, safest and quickest ways to raise funds. Further, these funds can be used for any purpose, such as your children’s education, house construction and repairs, business set-up, down payment for vehicle purchases, agriculture and allied activities and even annual holidays with family. In times of unexpected emergencies, gold loans are also a hassle-free way of obtaining instant cash to meet your needs. Besides these, there are multiple benefits that people can reap from availing a gold loan. Here are a few:

Attractive interest rates and low processing fees: Since gold loans are secured loans, they are subjected to lower rates of interest than unsecured loans, such as personal loans, even though they serve the same purpose. Personal, auto loans also charge a sizable hefty processing fee which is not the case in gold loans. While interest rates on personal loans are more than 15%, interest rates on gold loans range from 7% to 15% based on the loan amount. UBI’s gold loan scheme has one of the lowest interest rates on gold loans. It also charges zero processing fees on gold loans for agricultural purposes and for others, it is waived for this festive season.

Simple documentation: The documentation process to avail a gold loan is simple and minimal. You just need to submit your identity and address proof. Unlike the case of personal loans, there is no need to furnish income proof to avail a gold loan since the loan is backed by gold. This also leads to fast processing and quick disbursement of loans.

Available for varied Purpose:
Gold loan gives you the flexibility to use the loan to meet any type of expenses. For instance, through
UBI’s gold loan scheme
, the funds against the gold can be used for agricultural needs, business demands or personal needs such as unexpected emergencies, marriage, education, home repair etc.

Safety of gold:
As the gold will be returned to you once you have repaid the loan, the responsibility for the safety of the gold is on the lender. All gold is secured in bank vaults and lockers for the loan period. This allows you the freedom to meet your needs while keeping your assets safe.
Minimal eligibility: You must meet stringent minimum criteria to get personal loans. This is not the case with gold loans. For gold loans, credit history does not come into the picture as gold is provided as collateral. So, anyone owning gold can apply to avail of gold loans. At UBI, a gold loan is granted against gold ornaments, jewellery and specially minted pure gold coins sold by any bank, either singly or jointly, provided that the weight of the coin(s) does not exceed 50 grams per customer. People with even a 650 CIBIL score can apply for gold loans above Rs.25 lakh. Single customer can avail loan up to Rs. 1 crore against the pledge of gold ornaments.

Repayment flexibility: The tenure of a Gold Loan is quite flexible. You can repay the loan in 12, 18 or 36 months at your convenience. There is also no foreclosure fee in gold loans which is as high as 4% in auto, home and personal loans. Under
UBI’s gold loan scheme
, the tenure for repayment for demand loans is fixed based on the income generation coinciding with harvest and marketing time upto 18 months. For the term loan, the repayment period of the loan is determined by coinciding the term loan purposes with the harvesting and marketing season or generation of income from the activity and upto three years. The tenor for non-agriculture purposes is also upto 12 months from the date of sanction.

ET Spotlight

In addition to all these benefits,
Union Bank of India’s gold loan scheme
also fairly assesses the loan amount against 75% of the appraised value of gold ornaments of 22-carat purity or based on per gram rate fixed by the bank for 22-carat fineness. For agricultural purposes, farmers will be able to get a higher quantum of loan amount up to 85% of appraised value of gold ornaments of 22-carat purity or based on per gram rate fixed by the bank for 22-carat fineness. Additional weightage @ Rs.50 per gram for financing against the Hallmark gold ornaments

The scheme also gives the borrowers the flexibility of facility. Overdraft facility up to Rs.50 lakh can also be taken for various purposes against the gold ornaments where the customer can operate the account through cheque book, Debit card, Mobile banking and Internet banking. The loans against gold ornaments can be sanctioned in the form of a Union Green Card (KCC) with an operative limit of upto 5 years.

Union Bank of India has specialised retail branch outlets branded as ‘Union Gold Loan Points’, which provide exclusive and swift services to gold loan customers.

So, if you are looking to turn your dreams into reality and need funds to power them without getting stuck in endless hassles of unsecured loans, availing a gold loan from a trusted bank like UBI is one of your best bets. Invest your gold optimally and make your future worth its weight in gold.

Disclaimer: This article has been produced on behalf of Union Bank of India by TImes Internet’s Spotlight team.

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