INTERVIEW QUESTIONS LOAN GOLD LOAN DETAILS

Question: I am thinking to opt for a gold loan for my business. Should I go in for a gold loan from a bank or a non banking financial company? Which is a better idea and how much loan can I get?

Answer: As far as gold loans are concerned, the Reserve Bank of India has allowed banks and NBFCs to set up their own maximum cap. Earlier NBFC's used to offer high LTV for gold loans while banks were offering lower LTV. The constant decline of international gold prices has forced banks to lower the LTV on gold loans.

On an average for one year tenure, banks are offering 60 percent of LTV on gold loans instead of the earlier 70 to 75 percent. But NBFCs are more actively promoting gold loans. Considering the lower LTV these days, gold loans are not an ideal way to raise finances. I suggest you take a look at other options instead of a gold loan.

Before you opt for a gold loan, let me tell you that there are many more options to raise money for your business. There are various schemes where you can get working capital loan for your business and sometimes even without any collateral under CGTMSE scheme.

As far as gold loans are concerned, the Reserve Bank of India has allowed banks and NBFCs to set up their own maximum cap. Earlier NBFC's used to offer high LTV for gold loans while banks were offering lower LTV. The constant decline of international gold prices has forced banks to lower the LTV on gold loans.

On an average for one year tenure, banks are offering 60 percent of LTV on gold loans instead of the earlier 70 to 75 percent. But NBFCs are more actively promoting gold loans. Considering the lower LTV these days, gold loans are not an ideal way to raise finances. I suggest you take a look at other options instead of a gold loan.

Before you opt for a gold loan, let me tell you that there are many more options to raise money for your business. There are various schemes where you can get working capital loan for your business and sometimes even without any collateral under CGTMSE scheme. Source: CoolInterview.com

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