Blog #IIFL Gold Loan Payment

The best alternative depending on the investor’s budget, numerous options are available for investment in gold. Some beneficial gold investment alternatives can be - Gold ETF using a demat account from famous Institutions like INVESCO India gold ETF, SBI gold ETF, and Kotak gold ETF; investing in gold savings fund well known for its systematic investment method; investing in gold mining stocks; investing in physical gold, gold jewellery, gold bars and coins; and investing in equity-based gold funds. 

A person having insufficient funds to invest in gold can get a gold Loan, and online gold loan payment like IIFL Gold Loan Payment has made the accessibility of gold loans better. It enables the borrower to get a lump sum amount of funds instead of gold ornaments or other gold articles like gold bars; bank minted gold coins can be used for any purpose.

The Indian gold and diamond trade contributed up-to 7.5% to the Gross Domestic Product (GDP) of India and further added 14% to India's entire merchandise exports, as per the reports in first quarter of the year 2021. Even the employment sector of gem and jewellery is likely to employ 8.23 billion people by 2022. After the government of India found potential growth and value addition, the government declared that this sector must be the focus area for export promotion. The Indian government has launched several regulations to stimulate the investment and promote the technology and scale to encourage Brand India in the worldwide market. In addition, the government has reduced the import duty for metals like gold and silver to bring down the prices of precious metals in the local market of India.

According to the list provided by the International Monetary Fund and World Gold Council, the data regarding the highest gold reserve as of August 2020 states that India ranks 92 with 657.7 tonnes of gold reserve. The countries who tops the list of highest gold reserves and precedes India are: United States, Germany, Italy, France, Russia, China, Switzerland and Japan. India holds gold reserves with an estimated worth of Rs 254 crore approx, and there has been a continuous increase in the number. Approximately, 6.8 tons of gold was added up in February, 11.2 tons of gold in March, 1.2 tons of gold in April, and 2.8 tons of gold in May, which boosted India’s gold reserves, to a great extent.

After India was recorded to pile up 24000 to 25000 tonnes of gold in the households in India, it is considered the world's largest holder of this precious yellow metal according to the world gold council. It will be even higher when the world's second-largest consumer of gold, i.e. India factoring 608.8 tons of gold in the Central Banks Reserve, and an import duty of 10% of the domestic value of gold stocks, will be attached. 

Due to the appetite for the precious yellow metal, the gold holdings in India had accumulated over the decades even when there was subdued demand in the current years. Even due to the fluctuating price of gold, the Gold Loan interest rates vary. However, there are some other factors for the variation of gold loans from one financial institution to another.

The gold loan schemes like monetisation, bonds, and sovereign coins represent two per cent of the country's annual consumption, but the collection is assumed to go up with the renewed push. If the essential customs duty attracted by Gold rises from the current 10%, it can discourage the import of the same and can risk the higher amount of smuggling of gold. The Indian gold demand surged by 5 per cent after the local gold prices declined, and the Indian rupee strengthened towards the latter part of the quarter. Moreover, there is a chance of improving Gold demand in the upcoming time as the traditional wedding season and festival said Akshay Tritiya is coming forth.

Also Read:- Why choose a Gold Loan before other loans 

In India, gold is an essential metal that is utilised for a variety of purposes. As a result, it has both cultural and historical significance. But that isn't the end of it. For many Indians, gold is an asset or an investment. They regard it as a long-term investment that can be used in a pinch. Hence, gold acts as an inflation buffer and is included in many investment portfolios. The fundamentals of the gold market will be examined in-depth in this article gold loans are frequently chosen because of the lower interest rates.

During this pandemic, the gold rate today has fluctuated a lot, which has caused an increase in demand for gold loans. So let's first look at the reason why the gold rate has fluctuated. The government policies have both a direct and indirect impact on gold prices. Because the policy has a considerable impact on economic factors, a change in the interest rate. If the interest rate is lowered, gold prices will fall. Every country has a gold reserve because gold is a safe investment. As a result, any decision made over gold reserves will directly impact the gold rate. For example, suppose the central bank decides to sell some of its gold reserves on the open market. The gold rate will then fall dramatically as a result of this. Investment trends is also a factor the young Indian population enjoys experimenting with various investment alternatives. As a result, people have begun to experiment with gold investment choices. However, it does not provide a considerable return. It can provide you with a profit during periods of fluctuation. Changes in the national currency will affect gold rates in the country when the value of the rupee falls; for example, gold prices and demand rise, and vice versa. International relation is another factor; the gold price is heavily influenced by international ties between countries. Therefore, the price will rise or fall if the relationship between producer countries and other significant countries is stressed.

During the pandemic, the gold price has increased drastically. This has increased the demand for gold loans in India. So let's know more about what a gold loan is and how you can use it as an investment. IIFL Gold Loan Payment provides money when you need it or have a financial emergency, a gold loan is one of the greatest solutions to consider. A number of criteria support the claim that a gold loan is one of the greatest loans available from banks.

The increasing risk aversion among lending institutions, as well as the high level of uncertainty brought on by the covid-19 outbreak, has boosted people's willingness to Take out gold loans. Due to the implementation of stringent lockdown in most states, those who own small enterprises or work regularly are at risk of losing their jobs. Because unsecured loans such as personal loans and group loans are not available due to the global uncertainties, gold loans are in high demand. Due to the outbreak of the covid-19 pandemic in the financial year 2020, credit growth in this industry plummeted, while gold loans defied the trend. The burden of paying the gold loan is also low as the debtor can choose to repay the principal amount at the end of the repayment period and pay only the interest during the tenure.

During the lockdown in April and may operation hours of banks and financial institutions were limited, the disbursal take-off was not that good. Therefore, the further extent of gold loan demand will depend on how the wave of covid-19 pans out. The Gold Loan rate per gram estimates the amount of money you can borrow against your gold jewellery. The amount of loan will be determined by the purity and gold price of your jewellery, which will be adjusted for the loan to value ratio.

Must Read:- WHY GOLD LOAN IS THE BEST WHEN YOU HAVE LACK OF FINANCES