Whenever we move outside to look for credit facilities, we have several options to consider. Banks and non-banking financial companies offer products and services that are curated distinctly and minutely, acknowledging the current trends and the customer's requirements (borrowing individual or entity). The financial organizations, i.e., the banks and non-banking financial companies, have the same facilities but with slightly distinguished terms and conditions. Life is full of ups and downs. Good and bad times, both are part of our life. Loan facilities provided by lending organizations (banks and non-banking financial companies) can be an excellent way of tackling these situations.
Gold loans are secured form of loan facilities applied for by the borrowing individual or entity. These facilities are the one where the monetary assistance is provided against gold objects as the collateral. These loans are way more affordable than any other facility due to low-interest charges and minimal associated costs. The amount sanctioned is a percentage of the collateral amount calculated based on the current gold loan per gram rate. The market, i.e., the fair value of the collateral, is taken into account. The percentage used is the loan-to-value ratio. Usually, this ratio is between 75% to 80% until recently, when it was increased to 90% by India's Reserve bank (RBI). With the gold loan calculator, the borrowing individual or entity can estimate the monthly installment amount.
Loans against gold have always been a popular concept in India due to this asset's availability in almost every household. Compared with other credit facilities, the cost and documents required are significantly less, which could be a vital contributing factor to the increasing demand for this facility.For this facility or as a matter of fact, for any loan facility, the borrowing individuals and entities ave either bank or non-banking financial companies. The non-banking financial companies' foundation was based on the problem that was concerned with the borrowers who could not get support or aids from the existing banks.
They needed someplace to go, and the Non-banking Financial Companies (NBFC) was there answer. There was a time when NBFC was the last resort for people, but nowadays, as they have gained the confidence of the individuals and entities in the credit market. Non-banking Financial Companies (NBFC) are now an integral part of the credit market as more and more people are inclining towards them for financial assistance. The terms and conditions for gold loans provided by both the type f lenders are different. Besides that, the characteristics and properties of the credit facility will be the same. Although both are looked after by the RBI (Reserve Bank of India), the borrowers prefer NBFc for their enhanced and up-to-date options.
With an engaging interest rate, loan per gram, manageable repayment schedule, workable tenure, minimum documentation, and on-the-spot approval, the gold loan is borrower-friendly and more affordable than many other credit types readily available in the market.
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