Gold loans are growing on people day by day. They are convenient for people to get, easy for banks (or any financial institution) to process, and affordable when paying back. Compared to any other loan, gold loans always come out to be one of the best choices for people looking for money to pay off small debts or even for people looking for fundings for their projects. The Gold loan has consistently proved to be the cheapest loans as their interest rates have always been quite low. Gold prices, however, do not see this trend. The price of gold keeps changing daily and it keeps fluctuating and while it doesn’t usually go down, the gold prices sometimes do reduce. The good news here is that when you have taken a gold loan, after taking up the loan, the fluctuation in the market does not affect your loan. The repayment plan and loan value stay the same.
The gold loan market is expanding really quickly in recent years.
The market is expected to multiply exponentially and grow from the current (in 2019-20) ₹3,44,800 crore to ₹ 4,61,700 crore by 2021-22. This would be almost a 15.7% market growth in a very short amount of time and this statement was released by the World Gold Council recently. Another bank official from the Federal Bank gold loan reported that they are expecting a faster growth than yesteryears as the data shows that the demand for other credits has slowed down substantially. The bank is also aiming to increase its gold loan growth to reach 35% by the coming financial year.
A lot of sources have been hinting towards a decline in demand for other credit sources which means that a surge in demand for gold loans is on the way. This goes on to show that during times of crisis, secured loans, especially gold loans, is the way to go.
There are a lot of reasons for which one would opt to take out a loan but the fact that if the person needs quick money without much paperwork, a good value for their assets which is later redeemable, and a low-interest rate, gold loans are a foolproof plan for them. The repayment for them can be done in several ways, the schedule for the EMIs can be chosen by the borrower and a lot of other benefits are included with the loan which one can avail of if they require money.
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