Non-resident Indians (NRIs) looking to avail a gold loan have several options to choose from. Financial institutions and lending companies are eager to provide loans against gold jewellery to NRIs who are not permanent residents in India. Gold loan for non-residents is a form of secured lending that can meet the financial needs of NRIs who own gold jewellery.
Let's examine the eligibility criteria and documentation required for NRIs to avail a gold loan in India.
Eligibility Criteria for Gold Loan for Non-Residents
Before applying for a gold loan for non-residents, applicants must meet the following key eligibility criteria:
- Ownership of Gold Jewellery: NRIs must own sufficient gold jewellery, bars, or coins-typically 18-carat or higher purity-that can be pledged with a lender.
- Age Requirement: Eligible applicants are usually between 18 and 60 years old, with some lenders extending the limit to 65.
- Valid Passport and Visa: NRIs must submit copies of a valid passport and visa to verify their status, identity, and overseas residence.
- Proof of Repayment Ability: Lenders assess income and financial documents to ensure the NRI can repay the loan, including interest, within the agreed tenure.
By meeting the above key eligibility criteria, NRIs can get their gold loan application processed smoothly and obtain approval for the amount required. The financial institution will evaluate all documentation furnished to confirm the NRI's eligibility.
Documentation Required for Gold Loan for Non-Residents
To avail a gold loan for non-residents, NRIs needs to submit certain documents to the financial institution as proof of eligibility:
- Passport and Visa Copy: An NRI must provide a copy of their passport and a valid visa. This establishes their identity and confirms their NRI status.
- KYC Documents: Other standard Know Your Customer (KYC) documents, such as an Aadhar card, driving licence, voter ID, etc., need to be submitted as well.
- Photographs: Latest passport-size photographs are also required.
- Ownership Proof of Gold Jewellery: If the NRI's gold jewellery has been acquired through inheritance, gift, or purchase, suitable documents need to be furnished to the loan provider showing legal ownership.
- Employment Documents: To establish overseas occupation and income status, the financial institution may request pay slips, bank statements, tax returns, or proof of business ownership.
- Co-Applicant: Having a co-applicant can facilitate the lending process. The NRI can apply for the gold loan jointly with a family member or a known individual residing in India.
By submitting these key documents, the NRI can prove their eligibility and get their gold loan application processed faster. The financial institution will verify these documents to sanction the amount required and complete other formalities.
It is important to note that the applicant might also need to submit other documents as required by the financial institution.
Key Benefits of Availing a Gold Loan for Non-Residents
There are several notable benefits for an NRI considering a gold loan:
- Quick Processing and Disbursal: A key advantage is the quick processing and disbursal of funds. Once eligibility criteria are met, the sanctioned loan amount can be credited into the NRI's account very quickly.
- Attractive Interest Rates: Compared to personal loans or other credit facilities, gold loans attract comparatively lower interest rates, typically starting from 9% p.a. or lower in some cases. This makes it a cost-effective borrowing option.
- Higher Loan Amount: Financial institutions provide substantial loan amounts against gold pledged by the NRI. This can go up to 75% of the market value of gold ornaments. The amount sanctioned can be higher than other secured borrowing facilities.
- Flexible Repayment Terms: Repayment can be structured over months as equated monthly instalments (EMIs). Alternately, the NRI also has the flexibility to repay as a lump sum amount during the tenure, as per convenience.
- Retain Gold Ownership: An important benefit is that the NRI retains ownership of the gold jewellery. The ornaments stay in the safe custody of the loan provider and are returned upon loan closure.
In addition, leading banks, NBFCs, and gold loan providers have customised products for NRIs. Loan amount, tenure, rates and other terms may vary. Comparing schemes can help NRIs identify the best gold loan option.
Conclusion
A gold loan for non-residents allow them to leverage their idle gold assets and get funds in times of need. By meeting the eligibility criteria and submitting the right documents, they can get sizeable loan amounts approved quickly. Interest rates, typically starting at 9%, make gold loans a cost-effective borrowing option. When exploring borrowing options, gold loans should feature high on the list for most NRIs.
