Do you know how to take a loan by pledging gold? This may help you

loan, home loan, gold loan, India, NBFC, personal finance, fair market value, FMV, PMAY, radhan Mantri Awas Yojna

> How can I take loan by pledging my gold. And what will the bank do with the gold?
– Aryaman Gupta

Gold loan is a good financing option here in India. The documentation is simple with a rate of interest ranging from 10% to 15% per annum. There may be some outliers on either side. Most of the scheduled banks and private banks have this product. There are some non-banking financial companies (NBFCs) like Manappuram Finance and Muthoot Finance who have a sizeable portfolio of gold loans. This loan is basically financed against the asset value of the gold. The bank/NBFC will test for the genuineness of the metal. Once you repay the loan, they are obliged to give back the exact gold pieces to the borrower. The bank/NBFC keeps the gold with them and holds it as security for the tenure of the loan.

> My brother is selling the flat which he had taken a home loan from a bank. The outstanding amount is Rs 21 lakh. Now he is selling the flat to me for Rs 30 lakh for which I need to take a home loan from another bank and close his loan and pay the remaining Rs 9 lakh to him. Will a bank give a loan to me?
—Sridar Dakshinamurthy

Sure, any home loan lender will consider your case for a home loan. However, if the fair market value (FMV) of the flat is higher than the sale price of Rs 30 lakh, you may still have to pay the stamp duty on the higher FMV. There is also a chance that looking at the discounted sale price, the income tax assessing officer (AO) may consider the FMV of the flat to determine the short-term or long-term capital gains for your brother. If you go for the home loan to the same bank where your brother had availed his, the sanction process will be smoother and faster.

I want to avail the benefits of Pradhan Mantri Awas Yojna (PMAY). Can my father, who already owns a home in a city, be a co-applicant in the loan to arrive at desired eligibility, with the new property in my name only?
—Kunal Garad
Sadly, no. If you add your father as co-owner, you will not be eligible for PMAY. One of the criteria for PMAY subsidy is that the family should not own a pucca house. Only if you show yourself as a separate family unit, you may avail the PMAY.