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Shares of gold loan companies are seeing a boom on Monday. The shares of Muthoot Finance, Manappuram Finance and IIFL Finance up by 7%. IIFL Finance shares are trading at Rs 479 with an increase of Rs 30 to Rs 479.
At the same time, the stock of Muthoot Finance and Manappuram Finance is more than 3%. The reason for this boom in shares is believed to be the change in the rules of Gold Loan of the Reserve Bank of India (RBI). The Reserve Bank on Friday increased the loan-to-value (LTV) ratio on gold loans up to Rs 2.5 lakh from 75% to 85%.
That is, now a loan of Rs 85,000 will be available on a gold value of Rs 1 lakh, earlier this limit was Rs 75,000. Credit appraisal on small gold loan up to Rs 2.5 lakh will not be required, that is, paperwork will be reduced and the loan will be available quickly.
This will make it easier for people living in small borrowers, especially for people living in rural and small town areas. At the same time, this LTV will be 80% on gold loans ranging from 2.5 to 5 lakh rupees. LTV has been kept at 75% on a loan of more than Rs 5 lakh. Credit appraisal will have to be taken on loans of more than 2.5 lakh rupees.
Finance Ministry suggested to RBI
Earlier, the Finance Ministry had suggested to RBI that gold loans up to Rs 2 lakh should be exempted from strict rules, so that small borrowers could get loans quickly.
RBI Governor Sanjay Malhotra said, new rules will bring transparency and flexibility in the gold loan sector. The final guidelines will be released by Monday.
What is Gold Lon LTV?
LTV means loan-to-value ratio. LTV means how much loan you will get in proportion to the total value of your gold. After the new rules, a loan of up to Rs 85,000 will be available on gold of 1 lakh.
Take care before taking a gold loan
It is important to look at many aspects before taking a gold loan. These include interest rate, loan-to-value ratio, processing fees and conditions to repay the debt. Above all, the safety of gold pledged by you is most important. In such a situation, you should choose the iconic lender (ie a gold loan firm), who have a safe storage or locker facility or insured vault.
- Gold loan is a secured loan. Gold mortgage is low in the financial risk of the loan person.
- Processing of gold loan takes less time comparatively. It does not require much paperwork.
- Your investment price may increase as gold prices rise, which can lead to a profitable deal.
How long can you take a loan?
Usually you get a time of 3 to 2 years to repay the loan. But it depends on the bank and NBFC. For example, HDFC Bank gives loans from 3 months to two years. SBI gives up to three years. Muthoot and Manapuram give loans for a long time.
How much gold can be taken maximum?
At most, you will get a loan of 90 thousand rupees on one lakh gold. SBI gives gold loans up to Rs 50 lakh. At the same time, 1500 rupees also gives loans. Since these companies only give gold loans, there is no maximum limit here.
Need a document for a gold loan?
According to SBI’s website, you have to give PAN card, Aadhaar and 2 passport size. Apart from this, proof of address will also have to be given.
Is your credit score seen in it?
Gold loan is a type of secured loan. That is why your credit score does not matter. You get this loan easily and at low interest compared to personal loans.
How to repay the loan?
Banks or NBFC give you many options to pay the loan amount and interest, you can choose anyone according to your need. You can pay in equal monthly installments (EMI). Also you can fill interest during lump sum original payment. This is called bullet repayment, and banks take interest on monthly basis.
What will happen to your gold if you do not repay the loan?
If you are unable to repay the loan on time, the lending company has the right to sell your gold. Apart from this, if the price of gold falls, then the lender can also ask you to pledge extra gold. Taking a gold loan is right only when you need money for some time. It would not be right to use them for big expenses like buying a house.
Also read this news related to loan
Loans will be cheap, RBI reduced the interest rate by 0.50%: In 20 years, the benefit of about ₹ 1.48 lakh on a loan of 20 lakhs; Understand complete mathematics
Reserve Bank of India (RBI) has cut the repo rate of loan given to banks by 0.50%. Now the repo rate is 5.50%. This will give banks loans at low interest from RBI.
If banks transfer this deduction in interest to their customers, then loans may be cheap in the coming days. When the loan is cheap, the existing EMI of the people will also be reduced. Read full news
