Lockdowns imposed by the states for over 50 days have put a halt in everyone’s life in some or the other way. While some have faced salary cuts, others have lost their jobs. Thus, managing everyday expenses is a daunting task in the times of COVID19. If you are also struggling to manage your financial requirements, then a gold loan is undoubtedly a reliable option for you to choose in the middle of the crisis.
Why must one choose a gold loan in the middle of the COVID crisis:
In India, about 22000-25000 tons of gold is lying idle with the households and of which 65% of gold-stock lies with the Rural households. The potential of gold remains unutilized, especially in Northern India, where people still don’t consider it as a viable option. However, with organized players in the gold loan market realizing the potential of gold, the demand for gold loan is likely to increase in the near future.
Thus, various Banking and Non-Banking Financial Institutions are launching new gold schemes to attract new borrowers in this market. For instance, Canara Bank launched a unique vertical product and a gold loan campaign within which gold loan borrowers can get the lowest gold loan interest rate of 7.65% till June 30.
Easily accessible: With doorstep facility of getting a gold loan in your accounts without even visiting the bank, financial institutions are providing easy access to borrowing methods with digital platforms. For instance, SBI’s Krishi Gold loan facility can be availed online through the YONO app.
Rising prices of gold: The prices of gold are affected by the change in dollar value. Recently, there has been a record-breaking surge in the price of gold amid the global recession. Thus, borrowers can get a gold loan for more amounts with the same gold.
Nature of gold loan: A gold loan can be availed at lowe-interest rates than a persona loan. Moreover, at a time when the sources of income are unstable, a gold loan can be an ideal choice to take a gold loan, you don’t need to submit documents for income proof. Additionally, there is no obligation to maintain a good credit score unlike for other loans like a personal loan, home loan etc. You neither have to fulfil any minimum requirement of a credit score, nor financial institutions ask you to provide information about your credit score.
Features of Gold Loan: With gold loans, you can borrow short-term loan for a day upto 36 months for as low as Rs 1500. Thus, there is flexibility in terms of gold loan amount and tenure. Along with regular EMI options, some institutions provide a unique facility to repay the gold loan principal amount and interest at the end of tenure with Bullet Repayment Method.
Overdraft facilities with a Gold loan: A lot of Banking and Non-Banking Financial Institutions also provide Overdraft facility with a Gold loan. By using the overdraft facility, you can use the gold loan amount as per your convenience, and the interest is charged on the amount used by you. Also, you can easily renew the facility once you have paid the previous amount.
Unique gold loan products: Seeing the potential of gold loan markets, the organised players in the gold loan market are launching special products at a lower rate of interest and high LTV. Further, there are exclusive gold loan products for farmers who can avail a gold loan for farming and farming related activities. These gold loans are provided at a lower rate of interest. Some Non-Banking Financial Institutions also provide gold loan offers exclusively for women.