Muthoot Finance is an NBFC that offers financial services. It is most renowned for the gold loan scheme, which attracts prospective borrowers for its ease of access, payments, terms, tenure, and other facilities. Let us understand as to what makes Muthoot gold loan a preferable funding option for people in India.
Below given are reasons as to why Muthoot gold loan remains one of the best in India.
No Credit and Income Check
When a financial institution offers a loan, it checks the credit history and credit score of the applicant. The bank/NBFC also checks the employment status, income of the person etc. It notes the payment history and spending habit of the person. However, in Muthoot gold loan scheme, there is no need for the person to show income proof. Muthoot Finance does not even check for employment and credit history.
For gold loan, one gets tenure of a year or two. But, Muthoot Finance offers tenure between 7 days and 36 months, which is quite flexible for customers. The applicants can get tenure depending on the loan amount and rate of interest. If the interest rate is high, the person can try pay for the loan faster to reduce the interest payout, without having to shell out any prepayment charges.
Loan to Value Ratio
RBI has already mandated that banks and NBFCs cannot provide a loan amount greater than 75 percent of the gold asset’s value. Muthoot follows these norms and gives maximum loan amount up to Rs. 1 crore. The final amount will depend on the gold’s weight and purity, thus, there are chances of getting a lower loan to value ratio. The gold asset pledge is secured with the NBFC and stored in vault, which receives complete security. Once the loan is repaid, the borrower receives the ornaments, back.
There is no heavy paperwork involved as documents needed are minimal. The applicant has to submit proof of local residence, identity, and recent passport-sized photographs. PAN card and Aadhar card are mandatory. After filling the loan application form and signing the same, these documents must be attached and submitted. If the loan amount is high, Muthoot Finance may ask for more documents.
Simple Eligibility Criteria
Any person, who is over 18 years of age, can apply for gold loan with Muthoot Finance. The NBFC will not ask for employment status and proof, nor will demand salary slip or bank statement to know the income. The credit score of the applicant will not affect the loan approval chances, until and unless the loan amount asked is high. Women and farmers can get discounted rates on the loan for agriculture and business purposes. Proof of business activity must be furnished in this case.
Minimum Fees and Charges
When applying for a gold loan, a processing fee is charged. This fee amount differs from one provider to other. Usually unsecured loans reflect processing fee of up to 2.5 percent of the total loan amount, but in Muthoot gold loan, one has to pay only 0.25% to 1% on the complete loan amount at processing fee. This makes the NBFC a popular choice for jewel loan.
Moreover, the borrower does not have to pay the prepayment charges, and can thus close the loan at will without penalties. But, penalty charges will be incurred if the person defaults or delays payment. It is better to make timely repayments to keep credit score healthy.
Facility of Doorstep Service
Though one has to walk in to nearest branch office for gold valuation, the same can be done at the home of the borrower, only if the loan amount asked is high given huge amount of gold. Carrying gold in such case to the premises could be risky just in case a theft occurs on the way. Thus, Muthoot has come with doorstep service for special cases.
Here, the person can get the gold value analyzed by an expert at home. The doorstep service makes it easier for a person to avail the loan. The loan amount however, will reflect in the bank account of the borrower.
Past Relationship with Muthoot
It is possible that a person applies for a loan or service with an organization more than once. The relationship shared between the customer and the financial institution tells a lot about how the further associations would turn up to be like between the two.
For instance, if a person takes a service offered by Muthoot and does what is expected, that is, pay the EMIs on time, produce documents when necessary etc, then it will be easier for him to get a gold loan at a better interest rate and term from Muthoot, in the future, and vice-versa.
The above-given details tell us about Muthoot Finance gold loan scheme, and how it is one of the best loan schemes in India. Refer this information if planning to apply for a jewel loan with Muthoot.