A gold loan is a loan in which the borrower takes a loan from the bank and gives their gold as the collateral. In a gold loan, the borrower is not required to submit any other collateral to the bank other than the pledged gold ornaments. After the borrower gives his gold ornaments as collateral, he is provided with a gold loan. Gold loans are provided by various banks these days. Gold loans are considered to be safe and quick loan. Many people are opting for gold loans.
Gold loan is not a new concept in the Indian market. The gold loan started from the southern part of the country. In today's time, gold loans have occupied a special place in the Indian market. Today, we see many advertisements from many gold financing companies informing the public to keep their old ornaments in safe custody and provide a loan in return. India is a country with maximum gold users, so people prefer gold loans. Gold loans were considered as short term borrowings and were no interest leveraging activity back at that time. Back then, Muthoot finance and Manappuram finance were the two most important gold loan companies established in 1939 and 1949. A Gold loan calculator can help you in calculating your loan EMI.
Gold loans have occupied a special place in India. It is considered an important asset and immediate source of cash, especially for the rural households in India. Gold loans have become very popular in the cities as well as the rural areas. The gold loan still has the growth potential with increasing small business. The gold loan originated from the southern part of the country states like Tamil Nadu and Kerala. The money lenders from all over the country started collecting gold in return for money. All over the country, the landlords, shroffs and Marwaris from other parts of India have traditionally lent villagers money against their gold for special occasions like marriage after sometimes few banks in India established the whole process of gold loaning with proper norms. After establishing proper norms, the banks make gold loaning easy. Gold loan companies started accepting deposits from the public, also many local societies that had a few individuals who controlled the whole process like how and to whom the loans should be given. SBI gold loan provides a very low interest rate.
Gold prices are touching heights in India every day. Many gold consumers who hold gold in reserve always consider taking gold loans to meet their credit requirements, and Indian financial entities have a host of options on offer.
Pros of taking gold loans:
Conclusion
Gold loans have become popular by the time. Many people in India prefer gold loans. People living in cities and rural areas prefer to take a gold loan instead of any other loan because getting a gold loan is much easier. A gold loan is a secured loan. It also comes with a lower interest rate. Earlier, there were no proper norms of gold loans, but banks provide gold loans with appropriate norms and established rules to get loans quickly with time now. People nowadays get gold loans in less time with very little documentation. Over time gold loans are getting popular. In coming times also the customers of gold loans will increase.
Also read this: Gold Loan For Medical Emergencies