All About Agriculture Gold Loan Interest Rate
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Farming is still considered to be a significant sector for employment opportunities. Activities like dairy, livestock rearing, animal husbandry, crop cultivation, purchasing machinery, irrigation, etc. constitute a major part of farming activities. Farmers need adequate and hassle-free finance to meet their operating expenses and investment needs. Gold loan is an attractive option when it comes to sources of finance. Interest rates for farmers are relatively low in the case of gold loans for farmers.
They normally range from 8.00% to 10.00% per annum. There is a certain relaxation benefit also in the case of repayment and processing of the farmers loan.
It is a type of secured loan as it is a loan against jewellery. Financial institutions use your gold jewellery as collateral for money lending. The amount of mortgage is generally a percentage of gold’s worth.
The repayment is through monthly instalments mode. You get your gold jewellery back after the full repayment. In case of default in repayment of the mortgage, the lender sells your assets to recover the mortgage amount.
There are various lenders of gold loans, such as banking and non-banking financial institutions in the country.
If you are short of funds and require working capital for any of your agricultural activities, take a gold loan from Shriram City Union Finance for the best interest rates with no hidden charges.
Tenure of Gold Loan for Farmers
The duration for these loans is usually up to 1 year. However, it may range from 3 months to 36 months, depending upon the financial institution.
Features of the Loan
- Relatively low-interest rates as compared to other forms of finance.
- Minimum 18-carat gold purity.
- The documentation process, in this case, is quite easy and simple.
- Quick and easy mortgage amount disbursement, which makes it a hassle-free process.
- It has a convenient and flexible repayment schedule providing options for lump sum repayment and EMIs.
- The pledged gold stays safe in the vaults of financial institutions.
- Various financial institutions extend a mortgage renewal option.
Only certain people are eligible to avail the facility of farmers gold loan. They are as following:
- The minimum age criteria is 18 years & maximum age should not be more than 60 years at the time of maturity.
- Legal ownership of gold to be pledged.
Steps involved in availing an agricultural gold loan:
- Application for gold loan- The initial step is to compare the lenders. Then choose the one that fits your requirements. You can apply either online or offline. An application form will be given to you, which has to be duly filled.
- Submission- After the application process, you will be submitting your gold jewellery or coins as collateral to the lender. It has to be done offline only by physically going to the branch or institution.
- Evaluation- Once you submit your jewellery, the lender will determine the value of gold according to current market value through an in-house gold evaluation process. This decides the value of the gold loan amount. The greater the value, the greater will be the amount of lending. Gold loan eligibility calculator is also used for this purpose.
- Process of documentation- After evaluation, you have to submit a defined number of documents to the lender. This step is necessary to proceed further.
- Disbursement and authentication- An applicant needs to satisfy a certain set of lender conditions. They are related to age criteria or the purity of the jewellery to be pledged. A low CIBIL score applicant can also apply for a gold loan for farmers with a validity of candidature and documents. After authentication, the lender proceeds with the disbursement of the loan amount into your account.
- Repayment- As we are talking about the whole process, the final step involved is repayment of the amount. Along with flexibility, you get to choose primarily from 4 types of repayment methods. These are:
- EMI- Monthly instalment payment consisting of principal and interest amount.
- Bullet repayment method- Paying the entire amount in one shot at the end of your tenure.
- Advance interest payment- Upfront payment of full interest amount and the principal amount is paid at the end of your tenure.
- Regular interval interest payment- Regular payment of interest monthly, quarterly, semi-annually, or annually. The principal is paid at the end of your tenure.
This is the complete process involved in availing gold loans for farmers. This is to make you aware and avoid any difficulty in applying for the loan.
Documents needed for the process
The set of documents consists of:
- Application form duly completed.
- An identity proof may be your Voter ID, Passport, Aadhaar Card, Driving License, or Pan card.
- Address proof which may be your Voter ID, Passport, Aadhaar Card, or Driving License.
- Proof of agricultural area in the applicant’s name.
- 2 recent photographs of the applicant.
The application process in terms of eligibility criteria and documents needed may vary from one financial institution to another. However, the process mentioned above is a common criterion.
You can avail of your agriculture pledge jewel loan from Shriram City Union Finance to have a flexible and hassle-free process with minimal documentation requirements.
Key Terms Associated with a Gold Loan for Farmers
Loan amount per gram of gold-big chunks of jewellery instead of small ones gives a better amount per gram which is up to 75% of your gold value. 18 or 20-carat ornaments are lesser purity forms of gold. Hence, they offer a low value. Hallmarked jewellery offers a low processing fee and lowers the cost of a loan. These are some of the tips which will increase your average amount per gram of gold.
- Quantum of loan: A higher amount of loan attracts a lower interest rate for gold and vice versa. The institutions calculate LTV or Loan to Value ratio for calculating the loan amount against pledged ornaments. High LTV attracts a higher interest rate for gold loans for farmers and vice versa.
- Prepayment or foreclosure: There may be instances when you want to make a part prepayment of your loan before time. In the case of the entire prepayment of a loan, it is termed as a foreclosure. Banks or other financial institutions charge 0 to 1% interest rate in such cases. Some loans also have a lock-in period. Repayment cannot be made on such loans before time. Shriram City does not charge any foreclosing charges.
- Overdraft facility: Some banks or other financial institutions also offer an overdraft facility on such gold loans for farmers. They deposit up to 75% gold value in your accounts. You can avail it as per your need and pay interest only for the amount used.
- Processing fee: A processing fee is charged, which is up to 2%. Some institutions also offer lower processing fees. Check and compare this clearly among various options before choosing your lender.
- Choosing a lender: It is an essential part of the loan availing process. A good lender like Shriram City Union Finance protects its customers and fully ensures that they are ready to handle loans’ rewards and responsibilities.
Apply online now at Shriram City Union Finance for a gold loan for farmers and avail the required loan through a smooth process with reasonable interest rates.
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