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In a first, the nation’s largest lender State Bank of India (SBI) is offering gold loan as a top up loan to construct or buy a new home. Generally, banks offer home loan to buy or construct a house. But SBI is offering gold loan to make up any amount if there would be any shortfall to buy or construct your dream home.

Experts said, this loan is unique in nature and first in the industry. SBI called it ‘Realty gold loan scheme’ and this loan will be sanctioned very quickly and without any hassles.

Features

One can get a loan between Rs 50,000 and Rs 50 lakh by pledging his/her gold jewellery and others if any shortfall arises after taking a home loan. The money should be used to buy or develop that house. So, this is a sort of top up home loan by pledging gold ornaments.

There is a processing fee involved in sanctioning the loan. The amount would be 0.50% of the total loan amount and applicable GST, subject to minimum value of Rs 500.

The interest rate of this loan is 0.30% above the MCLR for one year, i.e. 7.3% per year.

Repayment tenure

The repayment tenure of the reality gold loan varies from 12 months to 36 months. Realty EMI gold loan and realty liquid gold loan’s repayment tenure is up to 36 months. On the other hand, realty bullet repayment gold loan’s tenure is 12 months.

Benefits

This is basically a top up loan by pledging gold ornaments. This loan has benefits similar to a home loan, i.e. income tax deduction and others.

On the other hand, like gold loan the processing time of this realty loan is very small, and no documentation is needed like home loan as the bank already have all the documents.

This is very short tenure loan, so the EMI amount is a bit high but the interest outgo is low compare to a full home loan.

Eligibility

Any SBI customer above 18 years of age is eligible to apply for this new scheme. The pre-condition of this loan is that the person should have an existing or new housing loan with SBI.