One of India’s top non-banking financial organisations (NBFCs), Muthoot Finance is best known for its gold loans. Because of their rapid disbursement and low verification requirements, gold loans are a popular financial product in India. A number of variables, such as the loan amount, the loan term, the purity of the gold, and the customer’s profile, might affect the interest rates for gold loans provided by Muthoot Finance.
1. Interest rates on gold loans
The interest rates on gold loans offered by Muthoot Finance are competitive and normally fall between 12% and 29% annually. The precise rate depends on a number of variables, including:
Loan Amount: Interest rates may be marginally cheaper for larger loan amounts.
Gold Purity: The interest rate and loan-to-value (LTV) ratio are impacted by the gold’s purity (measured in karats).
Loan Tenure: Since the chance of non-repayment rises with time, longer loan terms may have higher interest rates.
Customer Profile: More favourable rates may be offered to current clients or those with solid credit histories.
2. LTV, or loan-to-value ratio
Loan-to-Value (LTV) ratios for gold loans from Muthoot Finance can reach 75%. Customers can thus obtain loans up to 75% of the market value of the gold they pledge as security. However, the loan amount, the grade of the gold, and other variables may affect the LTV ratio.
3. Gold Loan Types
Muthoot Finance offers a range of gold loan options, such as:
Short-Term Gold Loans: These loans can be paid back in a short amount of time, usually one to twelve months, and are usually disbursed promptly.
Long-Term Gold Loans: These loans provide flexible repayment alternatives and have a longer term. Long-term loans may have marginally higher interest rates than short-term loans.
Customers can use the Gold Loan Overdraft feature to withdraw funds up to the authorised limit and only pay interest on the amount they actually use.
4. Processing Fees and Additional Costs
A processing fee, which can be anywhere from 0.5% to 1% of the loan amount, is normally assessed by Muthoot Finance for the gold loan. Furthermore, there can be other fees like:
Prepayment/Foreclosure Fees: Those who want to pay back their loans early may be subject to prepayment fees, which are normally about 1%.
Late Payment costs: Customers may incur late payment costs if they fail to make a repayment on time.
It’s critical to thoroughly read the loan agreement in order to comprehend all relevant fees.
5. Benefits of Gold Loans from Muthoot Finance
Fast Loan Disbursement: Many of Muthoot Finance’s gold loans are authorised in a matter of minutes, demonstrating the company’s reputation for quick processing and disbursement.
little Documentation: The loan is an easy choice for borrowers because it has little documentation requirements because it is secured by gold.
Repayment Flexibility: Muthoot Finance provides a range of repayment choices, such as bullet repayments at the conclusion of the loan term or monthly installments.
6. How to Apply for a Muthoot Finance Gold Loan
The process of applying for a gold loan from Muthoot Finance is easy and can be completed in-person or online:
Online Application: To obtain a quote, Muthoot Finance provides an online application procedure where you can upload documents, complete basic information, and get an estimate.
In-Branch Application: You can also go to a Muthoot Finance branch to have your gold assessed. Based on the results, the loan amount and interest rates will be discussed.
In conclusion
Muthoot Finance is a desirable choice for people wishing to borrow against their gold because it provides low interest rates on gold loans. Before making your choice, it’s crucial to evaluate interest rates, LTV ratios, and other costs offered by various lenders. Because the rate may vary depending on a number of criteria, including duration, loan amount, and gold purity, always make sure to carefully read the terms and conditions.