In the highly uncertain Covid pandemic, the lives of the commoner have once hit hard as the pandemic deepens. Businesses have either been forced to shut down or are on the verge of shutting down. A lot of individuals have entirely lost their sources of income. In unpredictable times like these, the demand for gold loans has thus risen.
In India, as most households hold gold in some quantity, gold loans have thus become a preferred option for those struggling to revive their income sources.
Why is the demand for gold loans rising in the pandemic?
Gold Loans are one of the most accessible options to avail funds in the pandemic. To avail funds, one can visit a bank, get their jewellery evaluated and valued. You can get upto 75% of the value of the gold asset based on the current gold rates.
Also, when you cannot easily avail of unsecured loans like personal loans, especially during the current times, the financial institutions have strict eligibility criteria such as high CIBIL score & Income requirement. Therefore, the demand for gold loans increases as you can avail of a gold loan without any income proof or CIBIL score.
In addition, to fully explore the gold loan markets, banks and non-banking financial institutions even provide gold loans online with an in-house evaluation of loans. From filling the gold loan application to getting funds, you don't need to step out of your house as the process is entirely digital.
Here are some other reasons why the demand for gold loans is rising
Usage of gold loans: The good part about a gold loan is that there is no restriction on the end usage of a gold loan. You can use the gold loan for any personal or business need.
Low-interest rates: Along with the easy availability, gold loans are offered at low-interest rates. The lowest rate of interest for a gold loan stands at 9.50%.
Flexible loan amount: There is flexibility in the loan amount offered by the banks and other loan providers. You can get loans of smaller and higher values depending on the value of the gold that you have pledged.
Minimal documents: To avail of a gold loan, you don't require documents for income proof. You can avail of a gold loan with minimum documents like identity and address proof. Also, there are lesser formalities for the verification of documents, unlike any other loan. However, banks do verify the purity of gold assets that you have pledged against a gold loan.
Flexible repayment options: Unlike any other loan, a gold loan provides a flexible repayment mode. You can repay the gold loan using the methods mentioned below:
