Gold loan is general purpose loan usually sanctioned by Banks to borrowers by asking them to pledge their gold and gold ornaments with the Bank.
Any individual who is and adult and owns gold and gold ornaments legally. There is no more eligibility requirement except that the person should be able to mortgage or pledge golds to the Banks and against the pledged gold loan amount can be disbursed to the Borrower.
It is all utility purpose loan and the loan amount can be used for any purpose. The banks are not interested to know what the borrower is going to do with the loan amount.
Maximum Amount :
Maximum loan amount is calculated on the basis of the value of the gold. Usually the Banks provide loan amount ranging from 70% to 90% of the gold market value.
In case of gold loan Banks do no ask for any more collateral security as the pledged gold itself plays a role of very good security as in general economic conditions the value of the gold will keep on rising.
Frequently Asked Questions :
Touchstone method, Nitric Acid test and specific gravity method.
The specific gravity of 24 carat gold is 19.3.
If necessary, Banks utilize the services of a reputed jeweller in the city to verify the genuineness of the gold ornaments.
In weighing ornaments containing wax, the weight of gold ornaments should be taken in water to ascertain the actual weight of the gold contents as wax and water have same specific gravity. It must, however, be borne in mind that this test may be misleading if ornaments contain base metal. Ornaments made of brass or other base metal with a coating of gold must not be accepted and caution must be observed that such ornaments are not passed off as solid gold.