Gold loans have been a popular credit option in India for decades, allowing borrowers to leverage their gold jewellery or coins as collateral for quick funds. Traditionally, gold loans were provided by banks and Non-Banking Financial Companies (NBFCs) only in the offline mode. This means you had to physically go to a branch to get a loan against your gold. However, the digital revolution has changed the gold loan industry, with financial institutions offering the convenience of securing gold loans completely online.
What Is a Digital Gold Loan?
A digital gold loan allows customers to borrow against their gold jewellery completely online without having to visit a bank or NBFC branch. This saves time and offers privacy compared to traditional gold loans requiring branch visits. The entire process, from application to money disbursal, is digital, convenient, and time-saving.
Features of a Digital Gold Loan
Below are some of the features and benefits of a digital gold loan:
- Quick Approval: You can get approved for a digital gold loan and receive funds according to the rules of the financial institution. But in short, there is no lengthy paperwork or procedures. Everything happens digitally through the financial institution's website or mobile app.
- Flexible Tenure: Digital gold loans allow you to choose a tenure according to your convenience to repay the loan. You can choose based on your ability to repay. Longer tenure means lower Equated Monthly Instalments (EMIs).
- Transparent Pricing: Financial institutions specify the interest rates and fees upfront, so there are no hidden charges later on. Also, you can track every stage of the loan process via digital channels for clarity.
- Convenient Repayment: You can conveniently repay your EMIs monthly through digital payment modes like net banking, UPI, etc.
Documents Required for Digital Gold Loan
Different banks and financial institutions have varied document requirements. Some of the common documents that are needed for KYC compliance are as follows:
- Voter ID card
- Driving Licence
- Aadhar Card
- Passport
- National Rural Employment Guarantee Act (NREGA) Job Card
How Does a Digital Gold Loan Work?
Here’s a step-by-step guide to help you understand how to apply for a digital gold loan:
- Online Application: First, visit the financial institution's website or mobile app and fill out an online application form with basic personal details like name, address, and phone number.
- Online Loan Offer: After filling out your details, explore the digital gold loan offers.
- Branch Visit: Once your appointment is fixed, visit the nearest branch of the gold loan provider on an appointed date and time for submission of physical gold ornaments.
- Gold Valuation and Loan Approval: The gold is valued at the branch, and the final loan amount is approved.
- Loan Disbursal: Disbursal into the bank account happens once gold is deposited at the branch.
- Repayment: Repayment is done digitally. You can visit the branch again to collect back the gold.
Conclusion
A digital gold loan is a fast, convenient, and secure way to borrow money by pledging your gold online. Whether you urgently need funds or want to leverage your gold for a loan, digital gold loans offer flexibility and competitive rates. By understanding the process and comparing different lending institutions, you can ensure you get the best possible deal that suits your financial needs.
