SBI personal gold loan details: Interest rate, documents requirement and other details explained

The COVID pandemic has impacted the finances of many as companies are laying off employees and cutting salaries to reduce cost. In such a situation it is obvious that you may face a temporary cash crunch. Those who do not have an emergency fund to fall back upon in such times, they typically opt for personal loans or gold loans to avoid a temporary cash crunch. Worth mentioning here is that gold loan is always a better option than a personal loan. Not only the interest rate is lower in the gold loan, but you also get a flexible repayment option.

State Bank of India, the country's biggest lender,  offers Personal Gold Loans scheme where a customer can avail a loan of up to 20 lakhs. This loan can be availed by all individuals above 18 years. The good thing is that you don't need to give any income proof to avail a gold loan. Typically banks offer up to 75% of the gold value as a loan based on the purity of the gold.

Here are the key features of SBI Personal Gold Loan scheme

Interest rate: SBI gold loan attracts an interest rate of 1.25% above the one-year MCLR (marginal cost of funds-based lending rate). SBI's one-year MCLR currently stands at 7%. So, SBI Personal Gold Loan scheme will attract an interest rate of 8.25% for a year.

The lender will charge 0.50% of the loan amount subject to a minimum amount of Rs 500 ( plus GST) as processing fees. You also have to pay gold appraiser charges.

Loan amount: Customer can avail maximum Rs 20 lakh as a loan under the personal gold loan scheme. The minimum amount of loan that you can opt for is Rs 20,000.

Loan repayment: Repayment of SBI gold loan depends on the type of gold loan you opt for. The lender offers three types of gold loans. Here are they

Gold Loan: In this loan repayment of principal and interest will start from the month following the month of disbursement. The maximum repayment tenor can be 36 months in this case.

Liquid Gold Loan: This loan is disbursed through an overdraft account with the transaction facility. Interest has to be paid monthly for this option. This scheme also has a repayment option of up to 36 months.

Bullet Repayment Gold Loan: Customer should repay this loan on or before the term of the loan or closure of the account. The maximum tenor will be 12 months for Bullet Repayment Gold Loan.

Document needed to apply for a gold loan: The process of sanctioning the loan and disbursing the amount is simple. The following documents are required while applying for a gold loan:

-Application form for a gold loan with two copies of photographs.

-Proof of identity with proof of Address

-Witness letter in case of illiterate borrowers.

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