From rich to poor, gold is the preferred asset class for Indian investors at any financial literacy level. The World Gold Council estimated in 2020 that Indian households probably hoard about 25000 tons of gold for a rainy day. At times of financial difficulty, people approach banks, NBFCs, and pawnshops to get loans against ornaments.
The yellow metal is one of the most acceptable collaterals for borrowing money, and hence the jewellery finance market is steadily growing. But many borrowers are hesitant to approach organized lenders for a gold credit without a bill to prove jewellery purchase.
Thankfully, the invoice is not among the list of required documents to be submitted when you’re approaching Shriram Finance for a mortgage against pledged jewels. You can avail of jewellery loans against coins, jewellery, bars, etc. and many people use inherited gold heirlooms as collateral.
How Do Indians Acquire Gold?
Indian leaders have long been issuing warnings against keeping most of the gold savings and recommending that Indians diversify their investments. Still, the demand for yellow metal remains high during the economic growth phase. There are many reasons why Indians have such a love for gold.
Gold has cultural and religious significance. We are used to valuing the yellow metal, from having golden ornaments and vessels for worship to legendary tales of prosperous ancient and medieval kingdoms. Those families who have centuries-old gold heirlooms consider themselves blessed and are reluctant to part with it under any circumstances. But with such possessions, people worry about getting a jewellery loan without a bill.
People who aspire to build a nice nest egg for their future buy golden ornaments, bars, and coins in addition to other investment instruments. In India, it is culturally significant to build up a reserve for children to inherit. The future generations, in turn, pass them down or get a finance on jewellery.
Facts about Gold Loans
1. It can be easier to get a gold loan without a bill than to even get a personal finance. It is because a personal mortgage is unsecured, unlike the loan on jewellery. Second, the gold finance rate of interest can often be lower from 11.5%.
2. You can get financed at a low gold interest rate even if you are self-employed or a housewife.
3. People commonly approach pawnbrokers to get financing for minimal amounts of money against the yellow metal. It’s safer for more significant amounts, starting from Rs 10,000 to Rs 20 lakh, to approach an institutional lender like Shriram Finance
4. It is easy to get a finance for high carat gold almost instantly. The documentation is usually minimal, and the approval happens very quickly; you can get the money within the hour.
5. If you have a low credit score, you can quickly get a jewellery credit without a bill since it is a secured finance. If you want to get your jewels back quickly, you can easily foreclose the credit without any extra charges.
6. Some lenders get worried about the ownership history or provenance of gold ornaments because they don’t want to get involved in any scams by miscreants to legalize stolen ornaments. Shriram verifies your address proof and identity, and jewellery valuation to give a jewellery finance without a bill.
7. You can re-pledge the gold to get more credit and also avail overdraft facility against it.
How to Get a Jewellery Loan without an Invoice?
It is possible to get a gold credit without a bill or invoice of jewellery purchase, and there is no rule against it. Here are the steps involved in getting financing against gold coins and other forms of the yellow metal:
1. Fill up the application form and submit it to the branch or online. Submit copies of all required documents.
2. Proof of identity and address include PAN card, Aadhaar card, voter ID, driving license, passport, utility bills, etc.
3. The gold coins or jewellery need to be submitted to the lender, and they place it within sealed packets for security.
4. The lender conducts a valuation of the gold items by appointing an independent expert assayer. The finance amount is sanctioned based on this assessment and communicated to you with a credit agreement or sanction letter.
5. You get the money after the letter is accepted.
As gold finances without bill are given out based on the gold value, the independent assayer is asked to submit an essay report. You would also have to accept the assay report after reading through it. The terms and conditions include a declaration of bona fide ownership of the yellow metal items pledged and no defects. The credit amount will be sanctioned based on the purity and amount of gold in the items pledged and is generally 75% in loan-to-value.
Understanding the Process of valuation for Gold Loan without Bill
Gold valuation may sound like a complicated process, but it’s swift. The jewellery can be evaluated in just a few minutes using a combination of human expertise and technological intervention.
Valuation experts determine the quality and total value of your jewellery. They classify ornaments into two types- solid gold jewellery and soldered gold jewellery. They use an XRF machine to determine the purity of the item.
Solid gold jewellery examples include bangles, thick ear studs, chains, Kada etc. It is quite easy to evaluate compared to soldered gold jewellery with layers, intricate designs and gemstones. The collateral value for a gold finance without bill sanction will be based on only the gold value and not any other precious stones forming the ornament.
The formula below shows the value:
Value of Gold in the jewel = (Gold Weight x Gold Purity x Day Gold Rate) / 24
Since gold is relatively liquid collateral, lenders ask for less documentation than a home loan. If the finance is not repaid or the security turns out to have been obtained fraudulently, the lenders have the right to auction them off.
One major concern you may have is about your golden ornaments’ safety and security while the lender has possession of them. Especially if you are pledging to get a jewellery loan without an invoice of purchase, you may be worried about regaining possession. With Shriram Finance as your lender, you can rest easy.
Shriram Finance maintains your pledged gold in a highly secure environment with e-surveillance and issues a receipt when taking the pledged jewellery. This receipt has a detailed description of the gold, its value, etc., and you have to maintain it carefully. When you produce it after repaying the loan in full, you will get back your ornaments. The lender also ensures your pledged items so that you can be compensated if the worst happens.
You can approach Shriram Finance branches if you have any worries about getting a gold loan without a bill, or you can also apply online.