What are the specific requirements for a festival gold loan?

A festival gold loan is a type of secured loan offered by banks and Non-Banking Financial Companies (NBFCs) against gold jewellery or ornaments, specifically designed to meet your financial needs during festive occasions.

Here are the specific requirements to avail of a festival gold loan:

1. Eligibility Criteria:

• Age: You must be at least 18 years old. Some lenders may have upper age limits, typically up to 70 years.
• Citizenship: You must be an Indian citizen.
• Income Source: While income proof is generally not required, being a self-employed individual, professional, farmer, or business owner can enhance eligibility.

2. Gold Purity and Quantity:

• Minimum Purity: The gold pledged must typically have a minimum purity of 18 to 24 carats. Usually, higher purity may yield better loan amounts.
• Minimum Weight: Typically, lenders require a minimum of 10-20 grams of gold jewellery to be pledged.

3. Loan-to-Value (LTV) Ratio:

• Most lenders offer loans based on the market value of the gold pledged. The LTV ratio is typically capped up to 75% of the gold's assessed value, depending on the lender's policies and current RBI regulations.

4. Documentation Required:

• Proof of Identity: This can include documents such as a PAN card, Aadhaar card, voter ID, or passport.
• Proof of Address: Generally acceptable documents include utility bills (electricity, water), bank statements, or rental agreements that show your current address.
• Passport-size Photographs: Typically, two recent passport-sized photographs are required.

5. Loan Application Process:

• You can apply for a festival gold loan either online or by visiting a bank/NBFC branch. The application process is usually quick and requires minimal documentation.
• After submitting the application and required documents, the lending institution will evaluate the pledged gold's weight and purity.

6. Processing Time:

• Gold loans are known for their quick disbursal times. Once approved, funds can be credited to your bank account within a few hours.

7. Interest Rates:

• Interest rates for festival gold loans typically range from 9% to 15% per annum, depending on the lender and other factors like the loan amount and tenure.