Due to Covid-19, our economy got broke. Because of Covid-19, the whole world had to sit back at home as the worldwide lockdown was there. Every small business was shut.
As small businesses, merchants, shops are suffering losses for the last few months. Now, people are thinking about pulling their socks up to set back their businesses.
The government also issued some guidelines to resume small and large scale businesses. Business owners are turning towards gold loans to meet their working capital needs. Gold loans are becoming more popular among businessmen in comparison to any other loan.
As far as loans have become a concerning topic. Banks have also become more cautious while giving any other loan. Due to Covid-19, the market has incurred a lot of loss. So, banks are concerned about the repayment capacity of the borrowers. For the banks also, gold loans are the safest solution. As to get a gold loan, the borrower has to pledge their gold to get the loan. So, financial institutions are at ease while providing gold loans.
Post the unlock phase, the demand for gold loans has risen in tier 2 and tier 3 cities in comparison to tier 1 cities. The growth of demand for gold loans in these cities. Because in these cities people mainly survive on small scale businesses.
As gold prices are rising. There is another trend in which a lot of people are selling their gold to take advantage of rising gold rates.
How gold is shining brighter? When the whole world’s shine faded.
Loan amount: As you apply for a gold loan, your chances of getting a higher amount of loan get increased. Because you are pledging your gold as collateral. The maximum limit of gold loans is INR 1 crore. You can get a gold loan of a minimum of INR 1000. Usually, companies offer LTV of 70-75% on the gold pledged.
Credit history: To get gold loans, credit history is not required. A person with a lower credit history is also eligible to get a gold loan. This is one of the greatest advantages to taking a gold loan. As the lender can recover their money by selling your gold.
Minimum documentation: Only basic KYC documents are required while applying for gold loans against gold and there are flexible repayment options. Gold loans can sanction instantly.
With the increase of demand for gold loans. Financial institutions are coming up with new ideas and policies to attract more gold loan customers.
Comments