When it comes to unexpected financial hurdles, gold often acts as a safety net for many Indian families. Indian Overseas Bank Gold Loan is one such gold loan scheme that can meet this unexpected financial hurdle. Indian Overseas Bank (IOB) offers several gold loan schemes targeting farmers, women, and others, all with their own terms and features. However, in this blog post, we’ll only discuss the ‘IOB Swarnalakshmi Scheme‘, a special gold loan scheme for women borrowers and understand its features, eligibility, interest rate and application process.
What is the IOB Swarnalakshi Scheme?
The IOB Swarnalakshmi scheme is an Indian Overseas Bank Gold Loan Scheme for women borrowers. It allows them to unlock the value of their gold assets. Under this scheme, women can avail loans up to ₹5 lakhs for non-productive purposes with an interest rate of 9.05%. Women customers who own jewellery and have an account with IOB can benefit from this flexible financing option.
Indian Overseas Bank Gold Loan Scheme for Women: Key Features
1. Purpose: The primary purpose of the IOB Gold Loan for women is to cater to non-productive domestic needs, such as household expenses, education, medical emergencies, etc. This loan is available to women who already have a savings or current account with IOB.
2. Age: The scheme is accessible to women aged 18 years and above.
3. Loan Limit: IOB offers a maximum borrowing limit of up to Rs. 5.00 Lakhs per borrower under this scheme. The loan amount is primarily determined by the value of the gold pledged.
Check the advance lending rate per gram of gold.
4. Repayment: The borrowers need to repay the loan within 12 months as a single payment, including the principal amount and the interest. This payment is due at the end of the loan term.
5. Insurance: To enhance the financial security of women borrowers, IOB provides a free accidental insurance cover of Rs. 2 Lakhs under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) for first-time individual women beneficiaries.
Indian Overseas Bank Gold Loan Interest Rate
The interest rate for the IOB Swarnalakshmi Scheme is specifically designed for women borrowers and is slightly lower than that of other jewel loan schemes from the Indian Overseas Bank.
Here’s a breakdown of the interest rate for IOB Swarnalakshmi:
- Interest Rate: MCLR + Special Spread (SP) (0.20%) + Risk Premium (RP) (0.05%)
Based on the current MCLR (as of April 7, 2024):
- Current MCLR: 8.80% p.a.
Therefore, the estimated interest rate for IOB Swarnalakshmi can be calculated as follows:
- Estimated Rate: 8.80% (MCLR) + 0.20% (SP) + 0.05% (RP) = 9.05% p.a.
Keep in mind:
- This is an estimated rate, and the actual rate you receive might differ slightly depending on your creditworthiness and other factors.
- Please confirm the exact interest rate with the bank directly before finalizing the loan.
Comparison of IOB Swarnalaksmi with other Gold Loan Schemes
Here’s a comparison of IOB Swarnalakshmi with the standard Jewel Loan scheme offered by IOB:
| Feature | IOB Swarnalakshmi Scheme | Standard Jewel Loan Scheme |
| Target Borrower | Women Borrowers | Open to All |
| Interest Rate | Lower (MCLR + SP + RP) | Higher (RLLR or Effective Base Rate) |
| Estimated Rate (as of April 7, 2024) | 9.05% p.a. | 8.85% p.a. onwards |
| Loan Amount Limit | Up to Rs. 5 lakh | Up to Rs. 50 lakh |
Understanding the Buzzwords- MCLR, SP, & RP:
Let’s break down the buzzwords associated with the IOB Swarnalakshmi Interest Rate:
1. MCLR (Marginal Cost of Lending Rate): This is the benchmark rate set by IOB, and it reflects the minimum cost at which the bank itself borrows money. It is the base rate for most loan products, including gold loans.
2. SP (Spread Percentage): This is an additional charge levied by IOB on top of the MCLR specifically for the Swarnalakshmi scheme. It’s a small percentage (0.20% in this case) that the bank adds to its borrowing cost to determine the interest rate for this particular loan scheme targeted towards women borrowers.
3. RP (Risk Premium): An additional charge is applied to the loan based on your creditworthiness. It’s a small fee (0.05% here) that reflects the bank’s assessment of the risk associated with lending to you. Borrowers with a good credit history may qualify for a lower-risk premium.
Putting it all together:
The IOB Swarnalakshmi interest rate is calculated by taking the MCLR (the base rate), adding a small premium (SP) because it’s a special scheme, and then adding another small fee (RP) based on your credit risk. So, even though the MCLR might be 8.80%, the additional charges can push the effective interest rate to around 9.05% for this scheme.
Also read, Bank Of India Mudra Loan
Documents Required for Indian Overseas Bank Gold Loan
The documents for the IOB Swarnalakshmi Scheme are the same as all other Gold Loans schemes and are listed below:
- Proof of Identity (POI): Aadhaar card, PAN card, Driving License, Voter’s ID card, etc.
- Address Proof (POA): Similar documents as POI (utility bills, ration card, etc.)
- Recent passport-sized photographs
- PAN card or Form 60 (for tax purposes)
- Gold ornaments you wish to pledge (ensure they are hallmarked for purity)
How to Apply for Indian Overseas Bank Gold Loan Online
You can apply online for the Swarnalakshmi Gold Loan. IOB provides a convenient digital platform for loan applications. Here’s how you can proceed:
1. Visit the IOB Website:
Go to the official website of Indian Overseas Bank.
2. Navigate to the Loan Section:
- Look for the “Gold Loan” or “Swarnalakshmi Scheme” section.
- Click on the relevant link to access loan details and the application process.
3. Fill in the Application Form:
- Complete the online application form.
- Provide accurate details such as your personal information, contact details, and the amount of gold you intend to pledge.
4. Upload Required Documents:
- Scan and upload the necessary documents.
5. Submit the Application:
- Review the information you’ve entered.
- Click on the “Submit” button to send your application.
6. Wait for Verification:
- IOB will verify your application and assess the value of the gold you’re pledging.
- Once approved, you’ll receive further instructions.
7. Visit the Nearest Branch:
- Visit the nearest IOB branch with your gold ornaments for physical verification.
- Complete any additional formalities as required.
Remember to check the specific details and requirements on the IOB website or contact their customer service for a seamless online application process.
Applying for an IOB Gold Loan Offline
If you’re interested in obtaining an IOB Gold Loan offline, here’s a step-by-step guide:
1. Locate your nearest IOB branch: You can use the branch locator on IOB’s website (https://www.iob.in/Branch.aspx) or inquire by phone about the branch closest to you.
2. Gather necessary documents: Before visiting the branch, ensure you have the necessary documents.
3. Visit the IOB branch: Once there, express your interest in applying for an IOB Gold Loan. A bank representative will guide you through the process.
4. Fill out the application form: The bank representative will provide a gold loan application form. Fill it out accurately and completely.
5. Gold valuation: Bank officials will assess the weight and purity of your gold ornaments. Based on this evaluation, they will determine the maximum loan amount you can qualify for.
6. Loan approval and agreement: After considering your application and gold valuation, the bank will approve your loan. If approved, you must sign the loan agreement outlining terms like interest rate, repayment tenure, and loan amount.
7. Loan disbursement: Upon successful verification and agreement signing, the bank will disburse the loan amount to your account. They might also securely store your gold ornaments in the bank’s vault until the loan is fully repaid.
Conclusion
In conclusion, the Indian Overseas Bank Gold Loan, particularly the Swarnalakshmi scheme designed for women, offers a convenient and secure way to access funds when needed. With competitive interest rates, flexible repayment options, and the safety of your gold being insured, this loan can be a valuable tool for financial empowerment.
So, I’ve tried to cover the gold loan scheme in this article with every detail you need. If you like the article, please comment and share it with others.
Frequently Asked Questions (FAQs)
This scheme is specifically designed for women borrowers aged 18 and above.
Yes, only women who have savings accounts with Indian Overseas Bank can apply for this scheme.
The maximum loan amount offered under the Swarnalakshmi scheme is Rs. 5 lakh.
You can pledge gold ornaments, jewellery, or pure gold coins (subject to weight limitations) purchased from banks.
Your gold ornaments will be securely stored in the bank’s vault until the loan is fully repaid.
The scheme may offer one-time free insurance coverage of Rs. 2 lakhs under Pradhan Mantri Suraksha Bima Yojana (PMSBY).
