Jewel Loans
Jewel loans, also known as gold loans, provided to individuals who pledge gold ornaments or jewelry as collateral. Here are some general features associated with jewel loans;
Collateral: Jewel loans are secured loans where gold jewelry is pledged as collateral. The loan amount is determined based on the purity and weight of the gold.
Loan Amount and LTV Ratio: The loan amount is typically a percentage of the gold's appraised value, known as the Loan to Value (LTV) ratio. This ratio may vary based on regulatory guidelines and bank policies.
Appraisal of Gold: The bank conducts a thorough appraisal of the gold to determine its purity and value. The loan amount is then calculated based on the appraised value.
Interest Rates: Interest rates on jewel loans are usually competitive. The rates may be fixed or floating, depending on the bank's policies.
Repayment Terms: The borrower is required to repay the loan within a specified period. Repayment terms can be flexible, and some banks offer options for regular monthly payments or a bullet repayment at the end of the loan tenure.
Loan Disbursement:Once the gold is appraised, and the loan is approved, the funds are disbursed to the borrower. This process is typically quick, making jewel loans an attractive option for those in need of immediate financial assistance.
Security Measures: The pledged gold is securely stored by the bank during the loan tenure. Security measures are in place to ensure the safekeeping of the collateral.
Partial Repayment and Prepayment: Some banks allow borrowers to make partial repayments or prepayments before the end of the loan tenure. Terms and conditions regarding prepayment penalties, if any, should be clarified.
Renewal or Roll-over:Borrowers may have the option to renew or roll over the jewel loan after the completion of the initial tenure, provided they meet the bank's criteria.
Customer Service: Cooperative banks often provide personalized customer service to assist borrowers throughout the loan application, repayment, and closure processes.