Tag: gold jewellery

Comparison of top bank personal loan rates, BFSI News, ET BFSI

Personal Finance

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A personal loan comes in handy when we are short of funds and need the money as soon as possible. A personal loan is an unsecured loan given by a lender. While taking this loan, the potential borrower is not required to provide collateral or security against the loan, unlike in a gold loan where gold jewellery is taken as security by the lender.

Read on to find out more about personal loans.

Where can you avail a personal loan?
While one can approach one’s friends and relatives for a personal loan, lending institutions such as banks and non-banking financial companies (NBFCs) offer personal loans in a more structured and ‘on-tap’ format. Apart from banks like State Bank of India (SBI), HDFC Bank, NBFCs such as Tata Capital, Bajaj Finserv also offer personal loans. As personal loan from one’s friends and relatives may not always be readily available, we shall consider the more structured format of personal loans offered by lending institutions.

Maximum and minimum amount
The minimum and maximum amount that can be taken varies from one lending institution to another. For instance, according to its website, SBI offers a maximum personal loan of Rs 20 lakh to salaried individuals. On the other hand, HDFC Bank offers personal loans up to Rs 12 lakh, as per the bank’s website.

According to Tata Capital’s website, you can take a minimum personal loan of Rs 75,000 and maximum of Rs 25 lakh depending on your eligibility.

Fixed or floating interest rate
While taking a loan, one should check with the lender if the interest rate offered on the personal loan is fixed or floating. In case the interest rate is fixed, changes in the bank’s MCLR will not impact your equated monthly instalment (EMI) amount. Also, do remember that normally the interest rates charged on personal loans are much higher than on home loans or loans against gold because the former are unsecured loans.

Interest rate, loan amount offered by banks for personal loans

BANKS Personal Loan Amount Tenure RoI (%)
AU Small Finance Bank Upto 7.5 Lacs Upto 60 months 11.49% – 23.00%
Axis Bank Upto 15 Lacs Upto 60 months 12.00% – 21.00%
Bandhan Bank >=50000 and <=5 Lacs 12 – 36 Months 15.90% – 20.75%
Bank Of Baroda >=50000 and <=10 Lacs 48 – 60 Months 10.50% to >=16.15%
Bank Of India Upto 10 Lacs 36 – 60 Months 10.75% – 12.75%
Bank Of Maharashtra Upto 10 Lacs 60 months 9.55% – 12.90%
Canara Bank Upto 20 Lacs Upto 60 months 12.40% – 13.90%
Central Bank Of India Upto 10 Lacs 48 Months 9.85% – 10.05%
City Union Bank >=5000 and <=5 Lacs 12 Months >=9.50%
Dhanlaxmi Bank >=1 Lacs and <=15 Lacs 12 – 60 Months 11.90% – 15.70%
Federal Bank Upto 25 Lacs 48 Months 10.49% to 17.99%
HDFC Bank Upto 15 Lacs 12 – 60 Months 10.50% – 21.00%
I O B Upto 5 Lacs 60 Months >=10.80%
ICICI Bank Upto 20 Lacs 60 Months 10.50% – 19.00%
IDBI Bank >=25000 and <=5 Lacs 12 – 60 Months 8.30% – 14.00%
IDFC First Bank >=1 Lacs and <=40 Lacs 12 – 84 Months >=10.49%
Indian Bank >=50000 and <=5 Lacs 12 – 36 Months 9.05% – 13.65%
IndusInd Bank >=50000 and <=15 Lacs 12 – 60 Months 10.49% – 31.50%
J & K Bank Upto 1.50 Lacs 48 Months >=10.80%
Karnataka Bank Upto 5 Lacs Upto 60 months >=12.45%
Karur Vysya Bank Upto 10 Lacs 12 – 60 Months 9.40% – 19.00%
Kotak Mahindra Bank >=50000 and <=20 Lacs 12 – 60 Months >=10.75%
Punjab & Sind Bank >=1 Lacs and <=3 Lacs Upto 60 months 9.35% – 11.50%
Punjab National Bank Upto 10 Lacs Upto 60 months 8.95% – 14.50%
RBL Bank Upto 20 Lacs 12 – 60 Months 14.00% – 23.00%
South Indian Bank >=1 Lacs and <=10 Lacs Upto 60 months 11.95% – 12.65%
State Bank Of India >=25000 and <=20 Lacs 06 – 72 Months 9.60% – 15.65%
Union Bank Of India >=5 Lacs and <=15 Lacs Upto 60 months 8.90% – 13.00%
Yes Bank >=1 Lacs and <=40 Lacs 12 – 60 Months >=10.99%
Ujjivan Small Finance Bank >=50000 and <=15 Lacs 12 – 60 Months >=11.49%

All data sourced from Economic Times Intelligence Group (ETIG)
Data as on August 29, 2021Eligibility to apply for personal loans
The eligibility criteria for sanctioning personal loans vary from lender to lender. To be eligible for a personal loan from SBI, your minimum monthly income should be Rs 15,000 irrespective of whether you have a salary account with the bank or not as per the bank’s website.

In case of HDFC Bank, to be eligible for a personal loan an individual should be between 21 years and 60 years of age and should have a job for at least two years, with a minimum of one year with the current employer. Further, if salary account is maintained with HDFC Bank, then the individual should have minimum Rs 25,000 net income per month. If the individual is not an HDFC Bank account holder, then he/she should have minimum Rs 50,000 net income per month.

Your credit score will also play an important role in determining whether or not you are eligible to get the personal loan.

Tenure of personal loans
Usually, a personal loan is offered for a maximum of five years by lending institutions such as banks. However, the tenure can vary from lender to lender.

Charges in personal loan
To avail a personal loan, a bank or NBFC will levy certain charges such as processing fees, stamp duty and other statutory charges etc. These charges vary from lender to lender.

Further, a lender can also levy pre-payment charges or pre-closure charges. Therefore, before taking a loan from the lender do check the different types of charges leviable.

Disclaimer: The data/information given above is subject to change, hence before taking any decision based on it, please check terms and conditions with the bank/institution concerned.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 – 66353963.



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Jewellers can now repay part of gold loan in physical gold, BFSI News, ET BFSI

Banking & Finance

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The RBI on Wednesday asked banks to provide an option to jewellery exporters and domestic manufacturers of gold jewellery to repay a part of Gold (Metal) Loans (GML) in physical gold. As per the extant instructions, banks authorised to import gold and designated banks participating in Gold Monetisation Scheme, 2015 (GMS) can extend GML to jewellery exporters or domestic manufacturers of gold jewellery.

GML is repaid in Indian rupees, equivalent to the value of the yellow metal borrowed.

Now, the Reserve Bank has reviewed the norms.

As per an RBI circular, “Banks shall provide an option to the borrower to repay a part of the GML in physical gold in lots of one kg or more.” subject to certain conditions.

One of the conditions is that the GML has been extended out of locally sourced or GMS-linked gold.

Also, the repayment had to be made using locally sourced IGDS (India Good Delivery Standard)/ LGDS (LBMA’s Good Delivery Standards) gold; and the yellow metal has to be delivered on behalf of the borrower to the bank directly by the refiner or a central agency without the borrower’s involvement.

Another condition is that the loan agreement should contain details of the option to be exercised by the borrower, acceptable standards and manner of delivery of gold for repayment.

RBI also asked banks to suitably incorporate all aspects into the board-approved policy governing GML along with concomitant risk management measures.

“Besides, the banks shall continue to monitor the end-use of funds lent under GML.” RBI added.

In 2015, the government had launched the Gold Monetisation Scheme to mobilise the yellow metal held by households and institutions in the country.



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Things to keep in mind while exchanging your old gold jewellery

Personal Finance

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When purchasing gold, we often exchange our seldom-used ornaments to reduce, at least to an extent, the total spend. If you have plans to exchange your old gold for new this festival season, here are some factors you should consider before you take the plunge.

No right time

If you think you will get a better deal if you exchange your old gold (in the form of jewellery or bar) when the gold prices are high, you are mistaken. This is because the gold you are exchanging and the new gold will buy are valued at the same price, which is the prevailing market price.

Whether the gold price is at ₹4,000 per gram or ₹5,000 per gram, you can always exchange your old gold ornament for the same quantity of new gold ornament at no additional cost (except making charges and taxes).

Having said that, we usually tend to buy more gold (in weight) than what we exchange. Thus, you will be better off buying gold (with or without exchange) when gold prices are lower.

Purity check

While exchanging gold, the timing of exchange doesn’t matter much. What matter is the weight and purity of the gold you are trading off.

Jewellers use a jewellery weighing machine and an assaying machine to determine the weight and purity of the gold you offer, after removing any stones and other embellishments.

If you would want to cross-verify if these metrics are assessed correctly by the jeweller, you can do so, if you have the invoice of the gold you are exchanging .

Of course, if your old gold is hallmarked, the details of the purity of the gold would be mentioned on the item itself. Hallmarking of gold is done only for three levels of purity — 22 karat gold (22K916), 18 karat gold (18K750) and for 14 karat gold (14K585).

A pure gold bar would be of generally 24 karat purity.

N Anantha Padmanaban, Managing Director of Chenna-based NAC Jewellers, says there is no need for customers to test the purity if the gold is hallmarked and brought from a reputed gold showroom.

Say, the gold you want to exchange is not hallmarked, you can request the jeweller to display the purity test results.

GR ‘Anand’ Ananthapadmanabhan, Managing Director of GRT Jewellers, another Chennai-based player, says the gold given for exchange with his firm will be melted and tested using an XRF machine right in front of the customers, if they request for it.

Following the acceptance of terms of the weight and purity of the gold exchanged, take a moment to notice the gold rate used to value your old gold.

If the gold being exchanged is of 18 karat, but the gold being bought is of 22 karat, the applicable gold rate to value the old gold should be the gold rate for 22 karat x (18/22).

For example, if the rate charged for the 22 karat gold you are buying is ₹5,000 per gram and you are exchanging 18 karat gold, your old gold should be valued at a minimum of ₹4,090 (5,000 x 18/22).

But if you are exchanging gold of 22 karat purity, it should be valued at the same ₹5,000 per gram.

Wastage on total value

Note that while the value of exchanged gold will be deducted from the cost of your new ornament, the making and waste charges (otherwise called ‘value addition (VA)’) and taxes (SGST and CGST — each of 1.5 per cent) shall be calculated as a percentage on the original vale of the new ornament and not on the deducted value.

For instance, say the value of the gold in the old ornament exchanged and the new ornament is ₹1 lakh and ₹2 lakh respectively. Your total cash outflow would be ₹1 lakh (₹ 2 lakh – ₹ 1 lakh) plus VA of ₹20,000 (say, VA is 10 per cent-then 2 lakh x 10 per cent) plus taxes of ₹6,600 (GST of 3 per cent on new ornament value plus VA). That would be equal to ₹1,26,600.

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