What Is A Digital Gold Loan And How Can You Avail It?

How would you feel if someone told you that you can avail a loan against your gold jewellery without actually leaving your doorstep? Indeed, gold loans have gone digital and borrowers no longer need to visit a lender’s branch.

In fact, digital gold loans have begun gaining popularity because of the Covid-19 pandemic, when movements were restricted due to lockdowns across the country.

What Is A Gold Loan?

A gold loan is essentially a collateralized loan against gold that has been pledged. Such a loan can be availed without much paperwork as long as the purity of the yellow metal has been ascertained and the KYC documents and details of the borrower are in place.

The most significant thing that makes a gold loan a quick and hassle-free option is that the credit history of the borrower does not really matter, as long as he or she has enough gold as collateral to cover for the loan. The physical gold itself gives the lender enough comfort.

Key Features Of A Gold Loan

Gold loans are a good option to meet very urgent liquidity requirements as they can be disbursed easily, once the gold is valued by the lender.

Moreover, these loans also allow for a flexible repayment option in which only the interest has to be paid during the tenure of the loan, while the principal can be paid toward the end of the tenure.

On top of that, repayments can be tailored to meet the requirements of the customers’ cash flow position.

What Is A Digital Gold Loan?

Digital gold loans have been made possible thanks to an online application process and to an underwriting to disbursal process that is digital-first.

Digital gold loans allow borrowers to get a disbursal right at their doorstep and discreetly at that. They don’t need to go to the lender’s branch and can instead hand over their gold to an executive, who will come visit them, have it valued, and get the loan disbursed within short period.

Documents Required To Avail A Digital Gold Loan

Any of the following documents can be submitted along with the online application to take a gold loan.

• PAN card 
• Aadhaar card
• Valid driving license
• Valid voter ID card
• Valid passport

Process Of Applying For A Digital Gold Loan

1. Application:

The first step in availing a loan is the application. In the case of a digital gold loan, this is done online. Borrowers need to provide their basic details like name, age, gender, residential address and mobile number. Following this, a lender’s representative will contact them and take them through the next steps. 

2. Evaluation Of Gold At The Doorstep:

The lender will send its executive to the prospective borrower’s residence to first complete the process of valuing the gold. Once this process is complete, the representative will offer the credit amount, which is usually 60-75% of the value of the gold.

3. Disbursement:

Once the borrower gives formal approval for the credit amount, the money will be disbursed to the bank account as quicklypossible. The process is hassle-free.

4. Safety Of Gold:

Well-known lenders keep the pledged gold in secure vaults that are under constant surveillance. This ensures there is absolutely no danger of theft or any damage to the gold jewellery.

Benefits Of A Digital Gold Loan

As is evident, taking a digital goal loan has several advantages over going to a branch to avail one. 

• Privacy:

Your privacy is maintained as you don’t have to physically visit a branch to deposit your gold.

• Convenience:

This is also very convenient as you don’t have to take your jewellery or other gold items out yourself. You simply hand the gold over to an executive who will complete the process. 

• Seamless Process:

The valuation process is very seamless, as is the estimation of the loan amount that can be disbursed against the gold. Almost all lenders offer a calculator on their website, making it even easier.

• Minimal Documentation:

Beyond ID proof and proof of residence, no other documentation is needed to avail digital gold loans. 

• Quick Disbursal:

Loan is disbursed within minutes, directly to the borrower’s bank account. On top of that, repayments can be made online. 

Conclusion

Just as the Covid-19 pandemic changed most other aspects of human life, gold loans have also gone digital. And it is only a matter of time that they gain more traction and become the dominant means of disbursal.

For borrowers, taking a digital gold loan, especially from a lender like IIFL Finance, is a very easy and convenient process that can be completed online within a few minutes.

Just because the process is digital, you don’t have to worry about the safety of your gold jewellery. The gold is stored securely in secret vaults that are guarded round the clock with the latest in surveillance technology.