Meet Raj, a spirited, go-getter entrepreneur with dreams to kick-start his own business. But there’s one tiny glitch - the need for funds. While looking for options, Raj stumbles upon his golden ticket - his grandma’s antique gold necklace. There’s just one problem - no invoice - as he received it as a family heirloom rather than a transaction. This article will explore the possibility and steps to help people like Raj, who are looking to get a loan against gold without having an invoice or bill.
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Understanding Gold and Gold Loans in India
Gold holds a special place among Indians. Traditionally, it is a symbol of wealth, prosperity, and purity. Be it a religious ceremony, festival, or any special occasion such as a wedding, childbirth or other celebrations, this precious yellow metal has become an integral part of our culture. Families with age-old gold heirlooms feel a sense of blessing and are hesitant to part with these cherished possessions.
This cultural affinity has made gold loans quite common in India. Individuals pledge gold items, such as jewellery, coins, or bars, as collateral to obtain a loan from banks or Non-Banking Financial Companies (NBFCs). The loan amount depends on the quality and market worth of the gold, with the Reserve Bank of India (RBI) dictating the terms and conditions through a Loan-to-Value (LTV) ratio. Presently, this ratio is capped at 75%, meaning borrowers can obtain a loan worth 75% of their gold’s value.
Did you know?
According to the World Gold Council’s estimate for 2020, Indian households are likely to have stashed away 25,000 tons of gold for a rainy day. This speaks volumes about the cultural significance of this precious yellow metal in Indian tradition. Want to know how much your gold could be worth in times of need? Click here for your gold value with the Gold Loan Calculator.
Advantages of Gold Loans
For people thinking about taking a loan using their gold, there are some key advantages to consider. Let’s look at why gold loans can be a good option:
1. Quick access to funds
Gold loans provide a swift solution to financial needs. The application process is simple and can be done online or at a nearby branch. The documentation required is minimal, making it easier for borrowers to access funds promptly.
2. No restriction on end-use
Unlike certain loans with restrictions on how to use the funds, gold loans offer complete freedom regarding end-use. Whether you need the funds for personal expenses, business requirements, or any other purpose, there are no limitations by the lender.
3. Lower interest rates
Gold loans are secured loans, meaning you provide your gold as collateral. This security aspect allows lenders to offer favourable terms, such as lower interest rates, than unsecured loans. The pledged gold acts as a guarantee and can save you a significant amount of money on interest payments.
4. No credit score concerns
Unlike certain loans that heavily consider your credit score, gold loans are secured by collateral, reducing the emphasis on credit history. Even individuals with a less-than-perfect credit score can still qualify for gold loan, providing them with an opportunity to address their financial needs.
5. Flexible repayment options
Another advantage is the repayment flexibility. Borrowers can choose from various repayment options, including fixed monthly instalments (EMI), bullet payments (principal repayment at the end of the tenure), and interest-first, principal-later schemes. This flexibility enables borrowers to align repayments with their financial capabilities.
6. Option for loan reuse and overdraft facility
Gold loan borrowers have the option to reuse their gold as collateral to secure additional credit. Additionally, some lenders offer an overdraft facility, allowing borrowers to leverage their gold holdings for added financial flexibility. This feature provides borrowers with the ability to access more funds when needed.
7. Accessible to a wide range of applicants
Whether employed, self-employed, or even a homemaker, as long as you have gold, you can qualify for a gold loan. This inclusivity ensures that various population segments can benefit from this financial option.
All these features add to the simplicity and popularity of loans on jewellery. However, concerns arise when considering a gold loan without a bill for such valuable items.
Can You Obtain a Gold Loan Without a Jewellery Bill?
There is no rule against obtaining a loan without the invoice for the purchased gold jewellery. In these cases, the lenders verify the authenticity and value of the pledged gold items through alternative methods, such as testing to assess purity or the appraiser’s expertise.
This means obtaining a jewellery credit without a bill is possible. Here are the simple steps to get financing against your yellow metal:
Step 1 - Fill out the application form, which is available either at the lender’s physical branch or online.
Step 2 - Provide proof of your identity and address, such as a PAN card, Aadhaar card, voter ID, driving licence, passport, utility bills, etc.
These documents are essential for verifying the ownership history and provenance of gold ornaments, ensuring lenders avoid involvement in potential scams while providing jewellery finance without a bill.
Step 3 - Submit your gold coins or jewellery to the lender for the pledge. For added security, the lender typically places these items within sealed packets, assuring the safety of your valuable assets throughout the evaluation process.
Step 4 - The lender appoints an independent expert assayer to conduct a thorough evaluation of the gold items.
The value of gold determines the amount of the gold loan in the absence of a bill. The assayer prepares a detailed report, which includes the purity and weight of the gold in the items pledged. The sanctioned amount depends on these assessed values, which are generally 75% of the loan-to-value ratio.
Step 5 - Following this evaluation, the lender communicates the sanctioned loan amount to you through a credit agreement or sanction letter. This letter also outlines the terms and conditions, including a declaration that confirms bona fide ownership and the absence of any defects in the pledged gold items.
Step 6 - When you accept these terms, you get the money.
Since gold is relatively liquid security, the documentation is less than for any other loan. However, if you don't repay the loan or have fraudulently obtained the items used as collateral, the lenders have the right to auction them and recover their money.
The Evaluation Process for Gold
Understanding gold evaluation adds transparency to the gold loan process. It is a swift and precise procedure that combines human expertise with technological interventions.
Evaluation on the basis of classification
Valuation experts classify gold ornaments into these two categories - solid gold and soldered gold.
Solid gold jewellery includes items like Kada, chains, bangles, and thick ear studs, whose evaluation is comparatively easy. Its valuation is as per the per-gram rate. In contrast, soldered gold jewellery presents more complexity due to layers, complex designs, and gemstones. The value depends on the market value of the gold and doesn’t include the rate of the stones.
Utilisation of an XRF Machine
The advanced technology in an XRF machine allows for an accurate assessment of the gold composition to determine the purity of the gold. The focus is on evaluating the intrinsic value of the gold rather than factoring in the presence of precious stones or intricate designs.
Valuation formula
Value of Gold = (Gold Weight x Gold Purity x Day Gold Rate) / 24
This formula ensures a fair assessment of the gold’s worth, considering its weight, purity, and the existing market rate.
Shriram Finance - Your Trusted Partner in Gold Loans
Although having a jewellery bill can make getting a gold loan easier, it's a small hurdle to overcome. So, don't let this minor requirement deter you from applying for a gold loan and meeting your financial needs.
If you’re applying, choose a trustworthy lender with transparent procedures, such as Shriram Finance. They are a reliable partner who are redefining gold financing.
Features of Gold Loans with Shriram Finance
With a commitment to providing the best value for your gold assets, Shriram Finance offers a host of features and benefits that make it a preferred choice for individuals seeking quick and hassle-free access to funds. They include:
- Affordable interest rates: Unlock financial possibilities effortlessly, as Shriram's gold loan offers competitive rates, ensuring cost-effective borrowing.
- No hidden charges: Enjoy peace of mind and financial clarity with Shriram's transparent gold loan, free from any hidden fees or charges.
- Quick loan disbursal: Get the funds you need promptly, experiencing the advantage of a streamlined and swift loan disbursal process.
- No income proof required: Embrace flexibility effortlessly as Shriram's gold loan eliminates the need for extensive income documentation, making the application process simpler.s
- Instant cash: Address urgent financial needs promptly by turning your gold into instant cash with Shriram's efficient and prompt gold loan service.
- Assurance of safety: Borrow with confidence, knowing your precious gold is safeguarded securely throughout the loan tenure within Shriram's trusted facilities.
In conclusion, to apply for a gold loan without a jewellery bill, consider the Shriram Finance Gold Loan. Apply now and experience the simplicity and efficiency of Shriram Finance.
