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Gold Loan

Muthoot Finance is a well established and reputed Indian financial corporation. It is the largest gold financing company in the entire world. While its headquarters are located in Kerala, India, it has over 4,400 branches all over the country. Muthoot Finance even has a global presence, with branches located in the United Kingdom, the United States of America and the United Arab Emirates. Muthoot Finance has been serving its customers for 128 years. It has over 81,000 customers who avail their services on a daily basis.
 

Muthoot Gold Loan promises cash against the value of gold, which is very easy to avail and affordable to be paid back. Muthoot Finance provides the convenience to customers in the form of affordable instalments payable monthly, low rates of interest and the facility to liquidate one’s gold any time.
 

Hence, with such a scheme no one has to worry about financial deficits as the gold assets possessed by a person can be pledged in order to get a loan. Muthoot Finance will give loan applicant cash against the gold assets that is pledged by him or her. The finance which is obtained from the loan can be used for meeting business related expenses like paying off the creditors, purchasing new equipment, maintaining the working capital requirement of the business cycle, etc. Alternatively, one can also use the finance from the loan for meeting expenses of a personal nature which may include taking a much-needed vacation, marriage expense of the child, meeting medical expenditure of the self or family, etc. However, loan does limit the use of the funds availed. They cannot be used for purchasing new gold jewelry or gold coins or for any other speculative purposes. Only legal and genuine financial needs are to be met using the loan funds.
 

Additionally, Muthoot Finance would have the sole discretion of granting or rejecting any application for the Gold Loan subject to its analysis of the application form. If the institution feels that the application is not sound enough or if the borrower’s repayment capacity is questionable, the company can reject the loan application. Under these circumstances, the applicant would have to legal right to bring the company’s judgement under question. The company’s decision would be final and binding on the applicant and would have to be honored.

Features of Muthoot Gold Loan

Features of Muthoot Gold Loan

The gold loan offered by Muthoot Finance has the below-mentioned features:
 

  • In the Muthoot Finance Gold Loan, a loan applicant can pledge any type of gold jewellery or ornaments. This includes various jewellery items such as necklaces, bangles bracelets, rings, kardahs, etc.
  • In the Muthoot Gold Loan, a loan applicant cannot pledge against gold bars, gold funds (gold Exchange Traded Funds), gold coins, and specially minted gold coins of banks that weight an excess of 50 grams.
  • The minimum age of the loan applicant for the gold loan has to be 18 years.
  • The purpose of the Muthoot Gold Loan is simple; it is to provide instant cash to overcome the short-term financial requirements of a person. These requirements may be such as money needed to fund a wedding or thread ceremony, money needed to fund medical expenses, money needed to fund school or college fees, money needed to pay for consumer durables or electrical or household items, etc.
  • Muthoot Finance processes the application made for availing the loan and disburses the loan in the fastest possible time-frame. For sanctioning of the loan, the documents of the applicant are of utmost importance and the requirements in terms of documents are simple. Documents such as the applicants’ Passport or Pan Card or Voter’s ID card, or Driving License are the kind of documents which are required. These are easily available with most of the applicants and thus the documentation process becomes simple. Muthoot Finance has in-house gold valuation experts at their branches, so the processing time of the loan can be as short as one hour.
  • Gold Loan from Muthoot Finance levies a reasonably priced processing fee and ensures that its customers are not subjected to any hidden charges as they inform their customers about all fees and charges from the beginning.
  • The minimum amount for which one can take a Gold loan is Rs.1500 and thereafter for higher amounts.  The loan limit is stretched to Rs.1 crore for the Muthoot Gold loan.
  • The loan has a feature of easy liquidity of the gold pledged to take the loan. By liquidity it means that the applicant can obtain his gold assets back anytime by paying off the loan in full. This is called prepayment and there is no prepayment penalty charged on the loan. After completing the outstanding requirement of the loan, the gold can be liquidated.
  • Walk-in customers who choose to visit the bank’s branch to avail of the loan armed with the proper and required documents can avail a loan within an hour. Since the required documents for taking the loan are easily available and simple in nature, they can be submitted along with the application form and the loan can be availed within the shortest duration of 3 minutes only.
  • The bank provides utmost security of the gold assets which are pledged with it. The pledged gold is kept under a three-layered security which makes the gold completely secure and risk-free
  • The interest rate that Muthoot Finance charges is somewhat similar with that charged by other banks and financial institutions. The rates of interestthat are charged are completely competitive so that customers may prefer Muthoot Finance rather than other banks or banking institutions.
  • Borrowers of the gold loan from Muthoot Finance have the option of pre-payment. There are no penalty charges if the pre-payment option is availed by the borrower.
  • Muthoot Finance boasts of in-house gold evaluation at its branches. Thus, the processing time for issuing the loan is significantly expedited.
  • The response time for customer service is shorter and quicker as compared to other banks and banking institutions.
  • The tenure can be as low as one day to 15 months for normal schemes and 36 months for EMI-based schemes. It varies from scheme to scheme.
  • There are no fixed margins in the Muthoot Gold Loan scheme.
  • There are two options open for repayment to gold loan applicants. One is Bullet Repayment, in this option, simple interest is paid at monthly or quarterly intervals and the principal is repaid on the maturity date. The other option is repayment by EMIs or Equated Monthly Installments. In this option, equal instalments comprising of the interest on a declining basis and a portion of the principal amount is paid every month by the borrower.
  • The processing fees are to a maximum limit of 1% of total loan amount sanctioned.

Documentation Required for Muthoot Finance Gold Loan

To avail of a Muthoot Finance Gold Loan, the loan applicant has to submit the following documents so that his or her loan application is accepted and processed.
 

  • A Passport which should be valid – the passport of the applicant would contain all the required information of the customer like the name, address, age, etc. and as such is an important document. A valid passport is one which is not expired.
  • Driving License which is valid – apart from the passport, the driving license also contains the important details of the customer and is accepted as a valid document for the loan. The license should however, be valid and not expired.
  • Election Card –also called a voter’s ID card which is issued by the Election Commission of India can also be accepted as a valid identity proof of the applicant
  • Aadhar Cardthe card is issued by the UIDAI and it contains the required personal details of the customer including his biometrics. The card can be taken as a vlaid identity proof for the loan
  • PAN Card –as per the relevant KYC norms which have been mandated by the RBI, the PAN number of the individual would be required when availing of the loan. This number is verified from the individual’s PAN card.

Fees and Charges for Muthoot Gold Loan

Mentioned hereunder is the list of the fees and charges applicable upon availing the Muthoot Gold Loan:
 

Fees

Amount to be paid

Loan Processing Charges

Up to 1% of total loan amount

Foreclosure Charges

Nil

Stamp Duty & other Statutory Charges

Corresponding to the applicable State Laws

Pre-payment or Part-payment charges

Nil


The above-mentioned fees and charges does not include the service taxes and any other Government taxes which would be additionally charged on the loan.

Muthoot Gold Loan Interest Rates

There are different rates based on different schemes that are offered by Muthoot Finance. Muthoot Finance offers its gold loans on a fixed rate basis. Fixed rate basis means that the rate of interest remains fixed over the entire loan tenure.       

 

Loan Tenure of the Muthoot Finance Gold Loan

Rate of Interest (%)

Loan Tenure of up to 1 month

12.0% onwards

Loan Tenure of over 1 month to 3 months

15.0% onwards

Loan Tenure of over 3 months to 12 months

20% onwards

Loan Tenure of more than 12 months

21.0% onwards

Muthoot Finance Gold Loan
(4/5 ) 1 Review
Gold LoanGold Loan
4/5

Good Bank

My previous experience with Muthoot was really good. So I was prepared that I want to apply for my gold loan from Muthoot only. This bank has very low processing fee and no pre-closure charges.

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Posted on: Dec 23 , 2016
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