Gold loan is one of the most sought after credit options allowing individuals to derive substantial funds and tide over unforeseen monetary setbacks.
Agriculture gold loan or gold loan for farmers is a tailored credit option that provides financial support to the peasants. It helps them cope with agricultural expenses and manage allied activities like purchasing land, high-end machinery and equipment for irrigation purposes, ploughing land, transportation of crops, working capital, buying vehicles, etc.
Benefits of availing agricultural loan
Here are the numerous features that comes with an agricultural gold loan:
- High quantum loan amount: Farmers receive a high-value loan principal by pledging their gold items as an asset to the financiers. Financiers evaluate the market worth of the pledged item and sanction the loan amount. Moreover, RBI Has kept the LTV ratio of a gold loan at 75%.
- Nominal Interest rate: As agricultural gold loan is sanctioned against a high-value asset, lenders are likely to levy a lower agricultural gold loan interest rate on the loan principal. Furthermore, applicants with decent CIBIL scores and stable earning sources are more likely to get a competitive interest rate.
- Flexible repayment tenor: Most lending institution offers an extended timeframe for repaying the gold loan amount. Hence, farmers can choose a loan tenor as per their repayment capacity and manage other financial obligations.
- Superior safety protocol: Leading NBFCs like Bajaj Finserv offers excellent security to borrowers’ high-value asset. Pledged gold items are safe and secured with 24X7 surveillance and in-built motion detectors. Moreover, lenders secure borrower’s assets in highly secure vaults, assuring top-notch protection. Also, farmers can avail gold loan insurance policy to protect their wealth from loss, theft or misplacement.
- Instant loan processing: As the gold loan is sanctioned against physical gold, farmers get easy gold loan approval. However, they must meet gold loan eligibility criteria and keep relevant documents handy.
- Nil foreclosure and part-prepayment cost: Peasants availing of gold loans are not charged an additional fee for part-prepayment and foreclosing loan accounts, thereby reducing the cost of borrowing.
- Varying loan type: Farmers can apply for varying agricultural gold loan types, mostly term loans and demand loans. Agricultural term loan allows farmers to pledge the carat metal to fund non-seasonal expenses like upgrading windmills, solar power and likes.
- Easy evaluation: The pledged gold item pledged as collateral is evaluated by an industry-grade carat meter, thus ensuring purity and authenticity.
Furthermore, a farmer can pledge the gold item in the form of ornaments or gold coins which lenders weigh before sanctioning a loan amount. Also, farmers can pay for a portion of the pledged asset and release that item from the lender.
Eligibility criteria required for availing agriculture gold loan
Here are the eligibility parameters that peasants have to meet in order to reap the numerous benefits of agricultural gold loans:
- Farmers opting for an agricultural gold loan must fall in the age bracket of 21 to 70 years.
- Applicants should be associated with irrigational or allied activities.
- Moreover, peasants should remain indulged in a pursuit that is approved by the Reserve Bank of India under the agricultural sector.
Moreover, farmers can apply for an individual or joint gold loan depending on lenders’ terms.
Documents required for availing agricultural loan
Intending individuals are required to keep the following documents handy to apply for a Kisan gold loan:
- KYC papers
- Signed application form with passport size photograph
- Ownership proof of the agricultural land
- Evidence of crop cultivation
- Proof of residence
- Business incorporation certificate
It is important to note that farmers availing of gold loans may have to submit additional documents mandated by the lender.
Meeting the eligibility parameters and keeping the documents handy will help farmers fetch a substantial loan amount against their pledged gold item.
Individuals can apply for an agricultural gold loan online from the preferred lender’s official website or by visiting the nearest branch of the lending institution.
To sum up, an agricultural gold loan is a collateral-backed credit option that caters to the varied financial needs of farmers and helps them with monetary assistance. Kisan gold scheme helps peasants access funds permitted against gold which otherwise sit idle as an asset.