Gold loans give borrowers a number of options for short-term business capital needs, as well as easy access to banks and non-bank financial companies (NBFCs) that operate in and around the market. The fact that a loan can be obtained over the counter distinguishes it in terms of distribution, encouraging daily borrowing habits that are solely based on need or opportunity. Customers will be able to borrow and repay gold at home on the same day they take out the loan and at any moment during the loan term.
In India, gold, in particular, has a great traditional and emotional significance, hence every household keeps it safe in a bank or bank locker. Similarly, when a borrower takes out a loan with a bank or an NBFC, the storage is free, secure, and completely insured, so most borrowers don't hesitate to use it as collateral ever ready available credit line.
Due to the nationwide pandemic that has been going on for the past six months, we may witness a dramatic surge in retail lending demand. This easy loan product is preferred by borrowers such as traders who want to restart their businesses, small manufacturers/SME who want to start their businesses, the salaried class who want to clear private debts, fund education, or fulfil other lifestyle necessities, and so on. A gold loan looks to be a reasonable option for addressing immediate credit demands in the current circumstances, where all banks and NBFCs have ceased lending due to elevated risk assessments in the epidemic and constrained cash flows in all commercial organizations.
This is attributed to unanticipated employment losses and decreased end-user demand for specific products or services. As a result, gold prices have risen since the pandemic began to sustain the payment periods of staff, vendors, personal or company overheads. As a result of the price and LTV ratio of the same ornaments by default, clients will acquire extra credit, driving up demand for gold loans.
With the rise in demand for gold loans, Delhi, Gujarat, Karnataka, Andhra Pradesh, and Maharashtra are the primary cities leading the way. Due to the increased demand for gold loans, major states such as Delhi, Gujarat, Karnataka, Maharashtra, and Andhra Pradesh are leading the way. Due to various branches with better market penetration, inactive and just reopened enterprises, and a larger population within a 10-30 km radius, Hyderabad, Bengaluru, Chennai, Pune, Delhi, Rajkot, and Surat have all been key business contributors. Small towns and cities, on the other hand, contribute a greater share of the Gold loan distribution due to cyclical demands and rural catchments that fluctuate with seasonal demand and crop cycles each year.
Banks recognized the gold market and used it as a major source of investment. Many NBFCs only give gold loans. Let us take the example of Yes Bank gold loan, to explain the advantages and ease provided by banks to their customers on gold loan.
1. Regardless of your credit history or the existence of a guarantor or co-borrower, you can receive a Gold Loan from YES BANK with ease.
2. You can simply receive a Gold Loan with us in the event of an emergency by following a simple application process and providing minimum documents.
3. The loan repayment is split into two parts: interest and principal.
4. This scheme allows the principal to be paid in one lump sum at loan maturity and the interest to be paid in EMIs at regular intervals to the bank.
CONCLUSION:
As a result, it's easy to see why gold loans have been so popular for so long. It leads to you receiving a valued sum that is typically insignificant in comparison to the loan's other stipulations. Gold loans are convenient and flexible, which benefits the customer in a variety of ways.
Read More:- MYTHS ABOUT GOLD LOAN