Gold loans are taken by people who have a lot of gold ornaments that can be pledged to an organization to get good cash. In the financial market, the gold loan has a prominent role to play. Earlier, golden ornaments were strictly considered a holy asset. Even pledging it to get capital money was forbidden. As time is changing gradually, the taboo is blurring out.
New entrepreneurs are vastly tilting towards gold loan plans as they are easier to get. Moreover, they come with lesser interest rates being a secured loan. Also, the gold price in India is quite reasonable. You can go through the section given below to understand the role of the gold loan in the financial market.
Gold Loan: Role in the Financial Market
In the Indian financial market, there are many ways people can get loans. The leading banks and NBFCs provide different types of loans to the people as they can fulfill their desires like buying a house or a car or a two-wheeler. Some loans like a gold loan and personal loan help people to escape from the financial crisis. The issuer does not place any restriction when it comes to usage of the capital money.
Gold loan plans play the following roles to ensure the well-being of the seekers:
The convenience of getting a loan
Due to their fascination with gold ornaments, most Indian families possess yellow metal. The organizations dealing with gold loans take only jewels as security to give away the capital. People with poor financial history can also avail of the gold loan if they have ornaments.
Serving the rural areas
In rural areas, there are no large networks of banks. So, people opt more for gold loans. The leading NBFCs serve the people with gold loans against their gold assets. Moreover, managing a gold loan is a straightforward task to do. Some people put the same gold jewels as the security to get a capital after they have repaid the first gold loan. As a result, the ornaments can provide excellent utility.
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Alternative to local money lending
Gold loans play a significant role in acting as an alternative to local money lending. Local money lenders generally charge a lot of interest and sometimes can force people to pay illegal amounts. The gold loan borrowers can give a reasonable amount of money according to the affordability every month. This way, they can escape from the debt trap easily.
Benefits of Gold Loan in the market
Apart from the roles mentioned above, gold loans have a lot of advantages. People are attracted to it due to the following beneficial facts.
Absence of a debt trap
Settling a gold loan can be an easy job. As the monthly interests do not escalate, the debt trap is absent. If a loan borrower fails to give a repayment in a particular month, he can provide it in the following month, along with the average repayment amount. Non-payment of the monthly EMIs for more than three months can lead the loan issuer to forfeit the security.
Short verification process
In the case of a gold loan, an issuer only checks the purity of the gold in the provided jewelry by the borrower. The capital amount depends on the amount of pure gold present in the ornaments. So, a borrower who is financially very poor can get the capital without any negotiation of the credit report or the documents for the pre-existing loans.
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No restrictions from the issuer
The gold loan issuer never puts a bar in terms of the usage of the capital money. As a result, the loan borrower can easily use the money in different fields. This is another reason why many loan seekers are willing to take the gold loan in the case of emergency monetary needs.
The capital amount of the gold loan gets disbursed very fast. You can get the whole capital amount within 3 to 5 working days. So, paying the necessary payments would not be a tough job for you.
The future market of the gold loan in India is quite promising. However, the loan seekers might not find more banks dealing with it. NBFCs have more possibilities to hold a good market in the country for the gold loan.
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In India, most people belong to the unorganized job sector. In such a situation, getting other types of loans can be quite tricky as there will be no worthy financial documents. As a result, the demand for a gold loan will be quite high.
Mostly all the Indian Households possess gold ornaments with them. Many of us are not aware of the intrinsic value. Gold is a handy resource. We can use and reuse our gold jewels multiple times and avail loan against gold. Avail gold loan and get fash cash. Gold Loan can act as a form of personal investment, and we can use it for multiple purposes. It is time to unlock the gold from our home lockers and instead put them in the bank lockers.
Also, self, comprehensive research plays a very crucial role. Check and compare different gold loan interest rates options for different banks.
Life is very uncertain, and that is why it is crucial to prepare oneself for hard times. There is no better investment option than a gold loan. “Gold Loan can act as a savior for all times.”
Also, the beauty of a gold loan is that it is ultimately a hassle-free loan. There is no need to have a prior credit score and other formalities. Moreover, the power lies within your hands as you possess gold jewelry.
Gold Loan is also very flexible as anyone can loan. Be it someone self-employed, employed or unemployed. The reach of gold is spread to both rural and urban areas. A unique agricultural gold loan is available for the farmers at a lower rate of interest.
Kick start your journey today and grab the best deal. You need to procrastinate with your dreams. No more excuses, as you have got the resources with you to put the plan into action.