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 City 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.
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.
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:
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.
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 City as your lender, you can rest easy.
Shriram City 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 City branches if you have any worries about getting a gold loan without a bill, or you can also apply online.