Product Details
Name of Bank
Union Bank of India
Maximum Loan Amount
Rs. 5 Lakhs
Interest Rate
8.7%
Loan to Value Ratio
75%
Maximum Loan Tenure
12 Months
Union Krishi
Kamdhenu Gold Loan
Scheme
Fees and Charges
Loan Processing Charges- Rs. 100+GST
Prepayment Interest - 2% of the outstanding amount, plus applicable taxes.
Late Payment Penalty: 2% of the outstanding amount, plus applicable taxes.
Penal Interest- 1% per month on the outstanding amount of the loan
Legal And Other Charges: Actual charges
Minimum CIBIL Score
Does not depend of CIBIL Score
Eligibility
Any individual owning gold ornaments/Jewellery/Coins, either singly or jointly.
Loans can be granted against gold ornaments/Jewellery and specially minted pure gold coins sold by our bank/other bank. The total weight of the coins should not exceed 50 grams per customer.
Existing as well as new customer, whose willingness to open account with us.
Fees and Eligibility
Concession and Features
Special Concession
None
Special Features
None
Pros
Competitive interest rates: Union Bank offers relatively competitive gold loan interest rates compared to other lenders.
Minimal documentation: The application process is simple with minimal paperwork required.
Quick approval and disbursement: You can get your loan approved and disbursed quickly, sometimes within the same day.
Flexibility in loan amount and tenure: You can choose a loan amount and repayment tenure that suits your needs.
No credit score impact: Gold loans are secured by your gold, so your credit score is not affected.
Safe storage of gold: Your gold is kept safe in the bank's secure vault.
Transparency in charges: All fees and charges associated with the loan are clearly mentioned.
Cons
Lower loan-to-value ratio (LTV): Union Bank might offer a lower LTV compared to some other lenders, meaning you may not get the full value of your gold as a loan.
Interest charged on a monthly basis: Interest is compounded monthly, which can increase the total cost of the loan.
Risk of gold price fluctuation: If the gold price falls while you have the loan, you may owe more than the value of your gold.
Prepayment penalty: There may be a penalty for prepaying your loan early.
Potential emotional attachment to gold: You should be prepared to part with your gold for the duration of the loan.
Pros & Cons
How to Open?
1. Online:
Start online: You can initiate the application process on the Union Bank of India website: https://www.unionbankofindia.co.in/english/gold-loan.aspx
Complete application: You'll need to provide basic details like your name, contact information, and loan amount.
Verification and visit: Bank representatives will verify your information and schedule a visit to your location for gold appraisal.
2. Branch visit:
Visit your nearest Union Bank branch: Bring your gold ornaments and required documents (listed below).
Fill out the application form: Bank staff will assist you with completing the form.
Gold appraisal: The bank will assess the purity and value of your gold ornaments.
Loan approval: Upon approval, you can receive your loan amount.
Documents Required
Identity Proof:
Any one of the following: Aadhaar Card, PAN Card, Voter ID Card, Driving License, Passport, Ration Card
Address Proof:
Any one of the following: Aadhaar Card, Voter ID Card, Driving License, Passport, Utility bill (electricity, water, telephone) with current address, Rent agreement (registered)
Income Proof (Salary earners):
Latest salary slips (past 3 months)
Form 16 for the previous financial year
Income Proof (Business owners):
Latest Income Tax returns for the past 3 years
Audited Profit & Loss account and Balance Sheet for the past 3 years
Gold Ornaments:
The gold ornaments you are pledging should be accompanied by a karatmeter certificate or hallmark certificate verifying their purity.
Additional Documents:
Application form: Duly filled and signed application form for the chosen gold loan scheme.
Photographs: Recent passport-size photographs of the applicant.
Signature verification: Bank may ask for verification of your signature from your current banker or any other source.
Account Opening and Procedure
Indian Bank
Indian Bank Jewel loan provides two loan schemes
1. Bullet Repayment
2. Monthly Repayment
The interest rate varies from 8.65% to 9.00% which is moderate as compared to different banks offering gold loans. However, the LTV Ratio is low i.e., only 65-70%, the other banks in the market offer higher LTV Ratio on the gold loans. Therefore, before applying for such loan check the terms and conditions properly and compare different banks offering gold loans.
Abhijeet Saxena
Abhijeet Saxena
Nalsar University of Law
Ex- Senior Associate, Shardul Amarchand Mangaldas, Delhi
Ex - Khaitan & Co. Bengaluru,
Ex - National Stock Exchange, Mumbai,
Ex - Argus Partners, Mumbai