Gold Loan FAQs

A bullet loan is a loan in which the borrower pays the interest on the loan regularly but the principal of the loan is paid to the bank/lender at the end of the loan term. It is also called is an interest-only loan.

Gold loan gets approved very fast, if your application and all the requirements are complete in all respect. It usually takes just few minutes to an hour for the loan amount to be disbursed.

A margin of 20% to 25% on the market price of the gold is generally required by the banks.

It depends on bank. Some banks charge pre-payment or foreclosure fee/penalty which may be 0.25%-3% which applies only to the outstanding amount of your gold loan. Some banks do not charge anything on pre-payment or foreclosure.

You can get back your pledged gold on successful completion of your loan repayment. Please note that the repayment of the loan is done efficiently and you should not default.

If you make any default or failure to repay the loan within the stipulated time, the bank/lender has the right to auction of your gold ornaments in order to recover his loan amount.

There is a penalty in the range of 1% and 5% which the banks levy if there is a delay in repayment of gold loan hence you must make sure that you don't make any delay in repayment.

The valuer evaluates the value of pledged gold on the basis of market rate of gold per gram on the day of submitting the gold loan application. It also involves verification of its purity.
Note that in case of gold ornaments or jewellery, only those parts which are gold are used to calculate the value and the weight of any other stones, gems or metals fixed on the gold ornaments will be deducted for the purpose of valuation.

Following things you need to keep in mind:

1. Check and compare the interest rates in various banks.
2. There should be no hidden costs.
3. Minimal documentation.
4. Security and Safe custody of pledged gold | gold ornaments | gold coins.
5. Pre-payment option-without any penalty.
6. Best customer service with a shorter response time.

Yes, you can continue your loan by renewing your loan after 1 year.