India is one of the largest consumers of gold in the world, so instead of keeping the gold lying idle in your locker, you can utilise it for taking loans on a low-interest rate. Gold loans have for a long time been a secure means of obtaining finance in India, as most households in India have the yellow metal as an asset which can be given as collateral.
Before making any investment, there are concerns like safety, liquidity, and returns on the investment are what most risk-averse investors look for. Investment in gold meets the fist two criteria very well and provides decent returns if you compare it with the risk.
The best use these days of gold is utilising it for gold loans. The popularity of gold loans has soared high during the latter part of last decade when Kerala-based specialised gold loan NBFCs like Manappuram gold loan and Muthoot Finance spread their wings to other parts of the country. After that, banks also started popularising this product and started marketing gold loans aggressively.
The gold loan is a secured loan that is lent instead of gold ornaments such as jewellery. The loan amount sanctioned by lenders is generally a percentage of the gold. Repayment is like any other loan through monthly instalments. Gold loans have a very decent LTV ratio depending on the gold rate per gram.
After the entire amount is repaid, you can get the gold back.
Gold loan is not like other secured loans as there are absolutely no restrictions on the end-use of these loans.
Gold loan these days are growing at a good pace in the market because the sheer convenience of getting a loan on something like gold is an excellent boost for the Indian households.
The eligibility criteria for gold loans are not as stringent as any other loans available. As we know that gold loan is a secured loan so anyone who has gold can get a gold loan. Gold loans can be availed by any Indian resident who is:
- Salaried professionals
- Unemployed Individuals
- Individuals having a low credit score and are not able to get any other loans.
Gold loan is one of the options available for people when they need funds, especially the women who want to use their stree dhan. In case of gold loan, the loan money does not have a specified end-use; hence it can be used for any purposes like use in business, wedding, travel, home renovation, purchases etc.
With the increase in the interest rate of the other secured and unsecured loans, we have seen Indian borrowers let go the resistance for pledging of gold ornaments. Besides that, the soaring high prices of the gold have pushed the loan eligibility on the ornaments making it a convenient, liquid and reasonably low-priced source of borrowing.
Gold loan these days are growing at a good pace in the market because the sheer convenience of getting a loan on something like gold is an excellent boost for the Indian households. The interest rates are so low, and the approval process is so much faster. Everything together adds to giving an individual a very convenient option to borrow. Most banks charge minimum processing fees of Rs. One thousand to upto 2%. Some banks may also offer lower processing fees.
With recent times and the policies in place where the unsecured loans like credit cards and personal loans charge exorbitantly high-interest rates, the gold loan comes handy. Even if we compare the gold loan interest rates to that of any other secured loan, the rates are comparatively lower. The gold loan can quickly be taken in the following cases:
- If you need the loan on an extremely urgent basis for a relatively short period of time, with low-interest rates.
- If you want to avoid extensive paperwork or have no income proofs to avail a loan, this loan requires only essential KYC documents.
- Not a very good credit history or CIBIL score.
- If you possess gold jewellery that you are willing to hypothecate, and you have no other collateral available for a loan.
- If you want to reduce your all-inclusive cost of borrowing, Gold Loans generally carry nil processing fees and prepayment penalty, thus reducing the overall cost of the loan.
By securing a gold loan, people can multiply money. This money can be further used to make other investments. And thereby, a chain can be made in which you can accumulate your savings. Gold Loan is straightforward, easy to process. As per the financial advisers, it is advised to take smart and robust investment options. Don’t consider a loan as a burden. With a strong strategy, gold is such a resource which can be used to multiply money. Use and Reuse your gold multiple times. Never sell your gold as it is the most valuable possession. Save, invest and reinvest. Also, you can get a gold loan with low cibil score by thereby increasing your cibil score by ming regular payment.
Your gold jewels are entirely safe in the hands of the bank. Being a secured loan, be careful to make timely payments. Also, there is no income proof needed. A student to a housewife can take a gold loan. A gold loan can act as a form of your loan.
Unlock your gold from the lockers and keep them in the vaults.During the COVID, taking a gold loan is considered to be a good and safe thing. Get your gold loan at the lowest rate of interest. Make the most of this time. Upgrade your skills and start your venture. People with a regular income can easily afford to get a gold loan. Kick a shoot today! The gold rates are low, and the market is also showing positive trends.COVID is not a stage of fear; first, it is the stage of maximum productivity. This is the time for action. Push your limits, come out of the comfort zone. Take a gold loan today!