Table of Contents
- Know about the surge of the gold loan market
- What are NBFCs?
- Top reasons for gold loan demand surge after the pandemic
- Benefits of applying for a gold loan with NBFCs
- Shriram Finance Limited Gold Loan details
- Bottom line
Gold is considered one of the most useful and auspicious reserves in Indian households. As per the World Gold Council report, gold worth Rs 1.5 trillion is kept in the form of jewelry by people.
Gold is one of the major assets in Indian culture. It is considered a status of wealth and used as a resource to meet immediate financial requirements at times of crisis. Significantly after COVID-19, there has been a surge in gold loan demand. During the pandemic, facing financial crises, many people found that gold was a better credit instrument than savings.
Know about the surge of the gold loan market
Getting financial assistance against gold is comparatively easier and faster than any other credit option. The best part about gold loans is same-day approval that too at the best interest rate.
What are NBFCs?
Financial institutions, including banks and NBFCs, have realized that after COVID-19, the gold demand surge is exponential. Many NBFCs like Shriram Union City Finance Ltd have come up with excellent schemes on gold loans for the convenience of customers. They have also given the option of a gold loan calculator on their platform to help a customer choose the best gold loan offer. NBFCs, with their best lending strategy, have changed the gold loan market scenario forever. Now, sitting from the comfort of the home, one can get a gold loan at the best interest rate in a day only. The gold pledged by NBFCs is valued as per the current gold price on the same day you have filed a gold loan application.
Top reasons for gold loan demand surge after the pandemic
India Quarterly Gold Demand Trend (World Gold Council)
| Trend | September 19 | September 20 | September 21 |
|---|---|---|---|
| Jewelry | 101.6 | 60.8 | 96.20 |
| Investment (bar and coin) | 22.3 | 33.8 | 42.90 |
| India Total | 139.1 | 94.6 | 123.90 |
| World total | 704.30 | 553.90 | 618.20 |
Job loss
In 2020, many people lost jobs, and chunks of business turnover slowed down. At that time, the only and safest option left with them was applying for a gold loan. It is the only secured loan financing option whose processing time is less, and interest is low. Speedy documentation, less paperwork, and quick disbursals are the main USPs.
Rise of gold prices
2020 is the only year to witness a surge in demand for gold. Most people prefer to pledge gold with NBFCs or banks to fulfill their immediate financial requirements. The rise in gold loans automatically increases the price of gold. A September 2021 report shows that demand for gold rose to 47 percent in 2020.
Investment opportunities
Gold loan has opened doors for all those who are looking forward to starting their online business. Using their gold, they can arrange the finances on their own. Gold loan is the biggest financial support for all those projects that have been on hold for many years.
Easy access to capital
Quick access to funds is the main reason why people apply for a gold loan. Just with a click of a mouse, you can get financial assistance at a low-interest rate by pledging gold as a collateral. It reduces the risk associated with the loan. Online gold loans offer comparison in terms of processing fee, interest rate, and gold loan amount.
Benefits of applying for a gold loan with NBFCs
Quick processing:
Using the API technology, NBFCs offer gold loans to customers. A hassle-free and transparent gold loan procedure with minimal documentation and speedy loan disbursal is convenient to a gold loan applicant. Within a few hours, the loan gets disbursed by NBFCs.
'Pay Interest Only' option:
NBFCs offer easy repayment options to the applicant when offering a gold loan. One of the most popular ones is paying interest only. Under this, an applicant has to pay only the interest and the whole principal amount on loan maturity. Other repayment options of gold loans are as follows:
Regular EMIs:
This option allows the borrower to repay the loan amount in easy EMIs, including the principal amount and interest amount.
Partial repayment:
In this option, borrowers can repay the interest and the principal amount as per affordability and convenience.
Bullet repayment:
According to this repayment option, borrowers have to pay the interest and principal amount to end the loan tenure.
Zero processing fees:
Most NBFCs are not asking for any processing fees from the applicant to process gold loan applications.
Minimal foreclosure fees:
Many NBFCs either have no or a minimum of 1% charge for foreclosure on gold loans.
No income proof:
When you apply for a gold loan from NBFCs, they never ask for any income proof; the reason is that loan is granted against gold. All that is required is a valid KYC document.
Lowest interest rates:
Getting a lower
Gold loan interest rate:
Offer is only possible when you are using an NBFC platform.
Offer the best security of physical gold:
NBFCs offer safe custody of a
Gold loan
Along with liability insurance of your gold asset.
Shriram Finance Limited Gold Loan details
- Customized Interest rates - Starting at 11.5%
- Processing Fees - Starting at 0.1%
- Eligibility Criteria - No income proof required
- Loan Amount - Rs 10,000-Rs 20 Lakhs
- Instalment - Flexible repayment options
Bottom line
NBFCs like Shriram Finance Limited are trying their best to help customers get the best loan offers.
A loan against gold is the safest financing option to meet all the personal and business requirements like medical emergencies, weddings, business expansion or any other similar financial needs. With quick disbursal and minimal documentation, getting a loan against jewellery is a go-to option. One can get a loan up to 75% of the gold value. It is known as the loan to value ratio.
Apply for a gold loan with Shriram Finance Limited; we offer a gold jewellery loan at simple interest without levying any additional charge. We have two gold loan schemes; EMI and non-EMI schemes. The Shriram Finance gold loan interest rates start from 11.5%. It makes Shriram Finance Gold Loan a compelling option to meet your financial needs.
