We are all familiar with the term gold loans and loan facilities as it forms an integral part of the credit system in our country. Proper functioning of loan facilities is important as it helps in creating a positive environment of investment and liquidity in the market thereby encouraging the borrowers to take more loans.
It is very important to point out what the exact functions of gold loans are as people are aware of the term and yet somehow they are not thorough with the exact meaning of gold loans and how it is important for the improvement of economic condition. The gold loan facilities help in mitigating liquidity crisis and help in encouraging the borrowers to invest a healthy sum of money by injecting credit into the system. Thus when the flow of credit is present, the borrowers feel sure and safe about the process of borrowing money and then repaying the loan within time to avoid any default of the loan facility which in hindsight encourages borrowers and lifts the economy from recessionary conditions. Following is a complete guide on how gold loans function and help in bringing about economic and monetary liquidity in the market-
What do you mean by Gold Loan and its associated concepts?
Before coming to a detailed discussion about how gold loans operate in a market, it is very important to identify the proper definition of Gold Loan and its associated concepts. Gold Loans firstly means that type of loan facilities where the borrowers deposit collateral security in the form of gold jewellery, ornaments, and other liquid assets. The valuation of these assets is done and according to the specific requirements of the borrower, the loan amount is discharged thereby yielding favourable results. Concepts associated with gold loans include interest rate and the loan-to-value ratio.
The definition of interest rate is the same as for any other type of loan facility which states that it is the fixed percentage of the amount of money that is charged on the loan amount and is payable monthly or quarterly by the borrower. The interest rates can be levied either on a fixed instalment basis or a variable basis according to the convenience of the borrower. Along with that we also throw some light on the concept of loan to value ratio which states that it is the process of valuing the gold deposited by the borrower according to which the loan amount is calculated and discharged by the banking institution to the borrower. It is only done after checking the specified requirements of the borrower.
Application Process of Gold Loans
Now comes the most important section concerned with the gold loan process and its functioning which is known as the application process of the gold loans. For applying for gold loans, firstly the borrower needs to fill out the requisite application form containing personal and income details of the borrower like name and identification details, age proof certificates, and income certificates specifying whether the borrower is capable of repaying the loans that he has taken from the banking institution.
After the application for the loan has been filed, the borrower would look to get the necessary approval from the banking authorities, and thus the loan amount would be transferred to the Manappuram gold loan online bank accounts of the borrowers. The disbursal process of the gold loans is a fairly simple one and it is done within 24 hours.
It is very important to understand the concepts of Gold Loan as they help in bringing about improvement in the economic infrastructure of the country. Proper use of Gold loans can help the economy prosper and has numerous advantages associated with it thereby improving the functioning as well. If you have any query in understanding about the gold loan, drop down your query and our executives will get back to you with the solutions within the least possible time.
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