When we find ourselves in need of money, there are different ways to get a loan. One interesting option in Dubai is to use our gold possessions to secure a loan. This means we can borrow money by using our gold as collateral without having to go through a credit check. In this blog, we will explore the world of gold loan in Dubai and learn how this unique type of borrowing works.
Whether it’s for unexpected expenses or to fund personal or business needs, understanding how to get a gold loan in Dubai can be really helpful. So, let’s dive into the details of gold loans in Dubai and find out how to use our gold to get the money we need.
Benefits of Gold Loan in Dubai
Gold loans in Dubai offer several benefits that make them an attractive option for individuals in need of quick financing. Here are some key advantages of gold loans:
No Credit Check
One significant advantage of gold loan in Dubai is that it typically does not require a credit check. This means that even if you have a low credit score or no credit history, you can still qualify for a gold loan in Dubai. The loan is secured by the value of your gold, making it a viable option for individuals with less-than-perfect credit.
Quick and Easy Approval
Compared to traditional loans, the approval process for gold loans is relatively quick and straightforward. Since the loan is backed by collateral, the evaluation and approval process is typically faster, allowing you to access funds within a short period. This makes gold loans an excellent choice for urgent financial needs.
Flexible Loan Amounts
The loan amount you can receive through a gold loan is directly linked to the value of your gold. Lenders typically offer a percentage of the gold’s market value as the loan amount. This flexibility allows you to borrow according to your specific requirements, making it suitable for both small and large financial needs.
Lower Interest Rates
Gold loans often come with competitive interest rates compared to unsecured loans or credit cards. The interest rates are typically lower because the loan is secured by the gold collateral. This can result in lower borrowing costs and more affordable repayment options.
Minimal Documentation
Gold loans generally require minimal documentation compared to other types of loans. The focus is primarily on verifying the ownership and value of the gold. This streamlined documentation process saves time and reduces the hassle associated with extensive paperwork.
Asset Preservation
With gold loans, you can maintain ownership of your gold possessions while still accessing the funds you need. Once you repay the loan in full, your gold is returned to you. This allows you to preserve your valuable assets without having to sell them outright.
No Impact on Credit Score
Since gold loans do not involve credit checks, they do not have an impact on your credit score. Whether you repay the loan on time or face difficulties it does not affect your credit history. This aspect provides a degree of financial flexibility and allows you to focus on meeting your immediate funding requirements.
How does Gold Loan in Dubai Work?
Gold loans work by using your gold possessions as collateral to secure a loan. Here’s how the process generally works:
- Evaluation of Gold: The first step is to have your gold evaluated by the lender. They will assess the purity, weight, and market value of your gold items to determine their worth. This evaluation helps the lender determine the loan amount you can qualify for.
- Loan Amount Offered: Based on the evaluation, the lender will offer you a loan amount, usually a percentage of the gold’s value. The loan amount can vary, but it is typically a percentage between 60% to 80% of the gold’s market value.
- Documentation and Agreement: Once you agree to the loan amount, you will need to provide the necessary documents, such as identification proof, address proof, and ownership proof of the gold. You will also need to sign an agreement that outlines the terms and conditions of the loan.
- Safekeeping of Gold: To secure the loan, you will have to hand over your gold items to the lender. They will keep the gold in a secure facility throughout the loan tenure. The lender will provide you with a receipt or acknowledgement for the deposited gold.
- Disbursement of Loan Amount: After the gold is deposited, the lender will disburse the loan amount to you. The funds can be provided in cash, transferred to your bank account, or given through other agreed-upon means.
- Repayment: Gold loans typically have a specific loan tenure, usually ranging from a few months to a few years. During this period, you will need to make regular repayments, including the principal loan amount and any applicable interest. The repayment schedule and mode of payment will be outlined in the loan agreement.
- Gold Redemption: Once you have repaid the loan in full, including any outstanding interest, you can redeem your gold by paying the necessary fees. The lender will return your gold items in their original condition.
It’s important to note that if you fail to repay the loan as agreed, the lender has the right to sell your gold to recover the outstanding amount.
Can You Get Your Gold Back Before the Loan Tenure Ends?
Yes, in most cases, you can retrieve your gold before the loan tenure ends. This process is known as prepayment or pre-closure of the loan.
Before taking a gold loan in Dubai, it’s essential to understand the repayment terms and conditions set by the lender. Some lenders may allow you to repay the loan partially or in full before the tenure ends, while others may have specific restrictions or charges associated with early repayment.
Lenders may also impose prepayment charges or penalties for repaying the loan before the agreed-upon tenure. These charges can vary between lenders, so it’s crucial to inquire about them beforehand. Evaluating the prepayment charges can help you decide whether it is financially beneficial to repay the loan early.
If you decide to retrieve your gold before the loan tenure ends, you must inform the lender of your intention to close the loan. The lender will provide you with the necessary instructions and documentation required to complete the loan closure process. However, you must repay the outstanding loan amount, including any applicable interest and prepayment charges, before the loan can be returned.
Where to Get a Gold Loan in Dubai?
Emirates NBD Gold Investment Account
The Emirates NBD Gold Investment Account offers individuals the opportunity to invest in gold without physically holding the precious metal. With a minimum investment of AED 500, customers can transfer funds from their AED or USD accounts and watch their gold investment grow.
The account is non-interest bearing and can be opened through Online Banking, branch submission, or by contacting a relationship manager. Investors have the flexibility to top up their investment regularly or set up a Systematic Investment Plan to purchase small units of gold monthly. Competitive prices make this investment option attractive for those looking to diversify their portfolio with gold. Click here to start your investment.
Finance House
Finance House offers instant Gold Loans for various financial needs, including education, personal, medical, business, home, car, or travel expenses. The loan amount ranges from AED 5,000 to AED 200,000*, and the loan is issued within 24 hours with minimal documentation required. The monthly interest rate is 1.33%, and terms and conditions apply*.
To inquire about the loan, individuals can provide their contact details, including name, email, phone number, emirate, and information about their gold possessions, such as weight (in grams) and karat. Finance House offers flexible payment plans to suit the borrower’s needs.
Call them here (600511114) to get in touch with their loan process.
FAQs
What types of gold are accepted for a gold loan in Dubai?
Most lenders accept 22-karat and 24-karat gold jewelry in good condition. Some might accept lower karat gold at a reduced loan value.
What is the loan amount I can get against my gold?
This depends on the weight, purity, and value of your gold, as well as the lender’s criteria. It usually ranges from 50% to 75% of the gold’s market value.
What are the interest rates and fees for a gold loan in Dubai?
Interest rates can vary depending on the lender, loan amount, and loan term. They typically range from 10% to 25% per year. Be sure to ask about any additional fees like processing charges or storage fees.
How long does it take to get a gold loan in Dubai?
The approval process can be quite fast, often within a day or two, if your documents are complete and your gold meets the criteria.
What happens to my gold when I take a loan?
The lender will securely store your gold in a vault until you repay the loan and any associated fees. You’ll usually receive a receipt for your gold.
What are the alternatives to a gold loan in Dubai?
Consider personal loans, pawn shops, or Islamic financing options like Sharia-compliant gold financing, which avoids interest charges.
