Gold Loan is also popularly called the secured loan. It is called a secured loan because a borrower can pledge the gold against the loan while availing of a loan. Gold acts as the collateral in the gold loan. The concept of gold is not new. Earlier also people used to take a gold loan. By the process of taking gold, the loan has become more organised with proper norms. People take loans in times of emergencies. Availing gold loans requires proper documentation.
These days gold loans can be availed from various banks and non-banking financing companies(NBFCs). The gold loan can be availed easily by pledging gold articles between the range of (18-24) Carats. You are required to submit gold as the collateral for security against the loan. The gold loan provides a great way to meet the daily requirements during the time of financial difficulties. A gold loan is not a fixed loan, and hence it can be used for multi-purposes.
Gold-loan/SBI-gold-loan SBI Gold Loan can be applied online or at the nearest bank branch. The gold loan requires minimum paperwork, and it also offers a very reasonable interest rate. One can easily avail of gold loans just by pledging gold articles or coins. Banks provide gold loans starting from Rs. 20,000 to Rs 50 lakh. Also, the processing fees charged by such banks are very minimal. The processing fees charged is 0.50% of the loan amount.
Gold-loan Gold Loan is a very convenient form of loan. The gold loan can easily be availed with a minimal set of documents from various lenders. Mistakes to avoid while taking a gold loan:-
- Not comparing the interest rate. One should always compare interest rates while taking a gold loan from a bank. The rates can range between 8.85% to 29% per annum.
- Not checking the processing fee. Some lenders can cost no processing fee or be as low as 10 rupees, or some can also cost a sizable amount.
- Not checking the lender's credibility. One should always check a lender's reliability while taking a gold loan.
- Always compare your options to get the best gold loan deal.
Customer segment for gold loan:-
House purchase: While buying a house, many people face financial difficulties and tend towards gold loans for support.
Business Needs: People take gold loans to meet their working capital as business requires huge investments. Many people take a gold loan for starting startups or investing in business as it can be availed without much hassle.
Children’s education: Many people take gold loans for education purposes. It is the most convenient form of a loan.
Agriculture: Farmers usually take gold loans for meeting their agricultural requirements.
Medical emergencies: During medical emergencies, also people tend to take gold loans for meeting the requirements. The gold loan can be availed easily because it requires minimal documentation. It is most convenient for emergencies purposes.
Consumption-related-use : Many people take gold loans for marriage, renovation of houses, purchase of goods, and many other purposes. Gold is a kind of multi-purpose loan. It can be used as per the convenience of the borrower; there are no restrictions.
Conclusion
Gold Loan has emerged as a financial rescuer in times of financial crunches. Banks and non-banking finance companies saw a rise in gold loans in recent years. Especially during the pandemic, the demand for gold loans has increased nationwide due to the financial difficulties faced by the people. The pandemic has affected so many people around the country. Many people are jobless, especially the ones who were daily wagers, migrants, and people working in the private sector. The nationwide lockdown has affected the majority of people in India. In these times, people are turning to banks for gold loans. Gold loans have occupied a special place in India. It is considered an important asset and immediate source of cash, especially for the rural households in India. According to experts, in coming times, the demand for gold loans will increase more. As gold loans are easy to get and require minimum documentation, most people choose to take gold loans from banks.