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Banks and other lenders do not wish to give out new loans right now. It is too risky for them. Thus, they are acting conservatively right now, and targeting only a limited segment of the population as their preferred customer segment. However, if you are in need of an emergency fund, help is at hand. Loan against property These loans are sanctioned against collaterals of residential, commercial and interest property. The interest rates of LAP starts from 8.95% on an average. But it does depend on the lender, the amount of loan, the lender’s credit profile and other things. The maximum tenure is 20 years. Amount of loan depends on property valuation and the borrower’s repayment capacity. Gold Loan Bank’s may not want to give traditional loans like personal loans right now, but they are very eager to give gold loans. Why? That’s because gold loans are secured loans . You can get gold loans within a few hours after you apply. The amount you get as a loan can be 75% of the gold value and ...

For years gold loans have been an important way to get finance in the country, when other means of getting funds were not available. Most households in the country have gold items at home.  These can easily be used as collateral when there is a drastic need for funds. The popularity of gold loans increased during the last the last decade due to the spread of operations of Muthoot and Manappuram Finance companies. Now, these companies have branches across the country. After seeing their success, banks also started to popularize this product. They have begun to aggressively market gold loans. It is important to remember that gold prices have been fluctuating by a considerable margin in recent years. Furthermore, the RBI has severely clamped down on gold loans by both the NBFCs and banks after imposing a number of restrictions in matters of gold loan interest rates and Loan to Value ratio. NBFC gold loans used to have a loan to value ratio of 85% to 90%, and now could only give till ...

The last few years, the gold loan business has been performing quite well. In fact, its good performance has led many new companies to try their luck in this industry segment.  Right now, however, the situation has changed drastically. The companies who arrived in the industry to try their luck, and even the big industry players who were already there, are having second thoughts. Should they bail out, shut down, or continue trudging onwards? Right now, it is a dying business if you are an NBFC (Non Banking Financial Corporation). But if you are a bank, well, things are not so bad for you. The thing is that the RBI has put a whole lot of restrictions on NBFCs. There are many rules in place to curb their unchecked growth, and to bring the gold loan industry under a more national control under the RBI. Since it was not possible if an NBFC operates without any regulations, the central bank now gives several guidelines and has imposed many restrictions on NBFCs. For instance, there ar...

The last few years, the gold loan business has been performing quite well. In fact, its good performance has led many new companies to try their luck in this industry segment.  Right now, however, the situation has changed drastically. The companies who arrived in the industry to try their luck, and even the big industry players who were already there, are having second thoughts. Should they bail out, shut down, or continue trudging onwards? Right now, it is a dying business if you are an NBFC (Non Banking Financial Corporation). But if you are a bank, well, things are not so bad for you. The thing is that the RBI has put a whole lot of restrictions on NBFCs. There are many rules in place to curb their unchecked growth, and to bring the gold loan industry under a more national control under the RBI. Since it was not possible if an NBFC operates without any regulations, the central bank now gives several guidelines and has imposed many restrictions on NBFCs. For instance, there ar...

In the USA, the rise in prices is mainly due to the Federal government’s loose monetary policy because of two reasons. Firstly, it is due to the coronavirus and the ongoing-pandemic. Secondly, prices are rising due to the continuing geopolitical tensions between US and China. The demand for Gold Loans is also on the rise in India. The real question that everyone is asking is what does the future hold for gold prices. Gold price records 7 straight gains Gold prices have been on a steady rise since the last quarter of year 2018. That was two years ago. Anyways, since that time gold prices have been showing record gains per quarter. This was the longest quarterly run gain since the financial crisis of 2007. Today, the gold price rise has a similar momentum. If this momentum continues for a few more quarters, the industry sector can recover well. This quarter’s percentage gain is highly dependent on the Covid-19 situation. It can’t be said when a vaccine for the pandemic virus will be av...

Benefits of Loan against Gold If you are still wondering whether a loan against gold is indeed as useful as claimed here, you can breathe easy. We are here to lay out all the ways in which a loan against gold can be advantageous to a borrower. Read ahead to learn all the benefits that a gold loan can offer to you. Easy Processing To avail a gold loan, all you need to do is approach a willing lender with the gold articles, and of course your basic KYC documents. The only process that precedes disbursal of the loan being verification of the quantity and quality of the gold produced, you can expect a hassle-free experience. As credit checks or income verification are not of much importance in the case of a loan against gold, the processing phase goes through easily with minimum documentation. This is because the loan is secured against collateral, which reduces a considerable amount of risk for the lender. Hence, they are free to go through with quick processing. Quick Disbursal In the ...

In other cases, the funds that you are in need of may not be covered by what a Personal Loan can offer. In such circumstances, it could be a useful remedy to opt for a secured loan- either a loan against property or a gold loan. If you are caught in a dilemma on which one you should go for, worry not! Here is a useful comparison of gold loans and loans against property,  which will help you comprehend the one that would suit you better, given that every person has means and needs. Gold Loans The Indian population does share a rather distinctive affinity towards gold. Each family, no matter what their financial status is, makes it a point to invest in keeping some amount of gold jewellery as a treasured possession. This is a great back-up asset indeed, as gold loans can offer instant liquidity to these gold articles, without having to sell them altogether, if one is just willing to pledge it as collateral in times of a crisis. Advantages and Disadvantages of Gold Loans Gold loans, ...

Gold loans have many other benefits as well in the form of minimal documentation, lenient eligibility criteria, and fast loan disbursal. Yet another interesting feature is that these loans come in various schemes to suit your requirements. In this article, we are going to discuss one of these forms: overdraft gold loan and compare it to the regular gold loan with EMI facility. If you are thinking of taking such a loan soon, you need to understand the difference between the two of these, so that you can pick the one that suits you best. The Difference between Overdraft Gold Loan and EMI Facility Gold Loan Different customers have different requirements, and to meet them, gold loans are of two types as well. Some of these types are gold loan overdraft, and gold loan EMI. It all depends on your financial requirements which ones you choose. To help you understand the difference, here’s what it's all about. Gold loan with EMI option In this option, you visit the nearest bank branch, gi...

The Economics of Gold Loan in India: According to a KPMG report in January, the Indian organized gold loan market is estimated to be valued at around Rs. 467,200 crore. Approximately, this is 35% of the gold loan market with commercial banks. Small finance banks, Fintech companies and NBFCs are now the key players in the market. The unorganized gold loan sector is thrice as large. Right now, there are a couple of big opportunities for the gold loan players in the organized market. Firstly, they have a big opportunity to bring unorganized money lenders under the organized market. This will ensure a tighter RBI regulation and a low rate of interest. Secondly, from out of the 22,000 tons of gold which Indian households have right now, only 5% are pledged as deposits of gold loans. Now is the time to make the best effort From all the rest, Muthoot Finance has been the preferred gold loan company for a long time. Compared to many NBFCs, its gold-lending business is de-risked. How can gold...

In the 2018-2019 fiscal year, companies dealing in gold loans have aggressively expanded their branch networks around the country, especially over northern and eastern states of the country. The KPMG report said, “Moving forward, these companies are expected to focus on optimizing their asset utilization and leveraging their existing branch infrastructure to maximize the brand-level AUM and customer outreach.” The name of the KPMG report is “ Return of gold financiers in India’s organized lending market .” What Brings this Growth? New-age fintech players NBFCs have opened up an untapped market among digitally enabled customers, the number of whom is daily increasing. All this has been possible due to the emergence of digital and online models of gold loan service. All this means that it is now easier than ever before to get a gold loan. For instance, a customer only has to provide minimal documentation online, and has to visit the bank just once to deposit the gold ornaments. Once thi...

Is the Gold Loan Market Growing? Think about this: The organized gold loan market in India was worth 25,000 crore in FY 2009. It grew at a compound rate of 38% between FY 2002 and 2009. Today, it is expected to grow at a compound rate of 40%. It is stated to reach a market value of 50,000 crore. According to a study by the ICRA Management Consulting Services, a study shows the alarming situation of pawn brokers. Big players like NBFCs, new Fintech companies and others are coming into the market, making the work of small players very difficult. However, there are other reasons as well. Firstly, it is all about convenience. Sometimes, when customers pledge their gold for loans, it is because of desperation due to some situation. However, it is still are step more convenient than other personal loans. One can get gold loans today faster. Secondly, gold loans are known for being offered with a low interest rate. While it is currently increasing certainly due to increasing demand, it is s...

A personal loan is unsecured, which means that it does not need you to pledge any asset/property (business or personal) in order to get the amount. One can get a personal loan and utilise it for a number of personal or professional requirements - to fund a wedding, getting household appliances, tackling a medical emergency, funding children’s higher education, consolidating past debts, or even going on a trip abroad! The eligibility criteria, which is often what makes or makes or breaks the deal in case of personal loans,  incorporates numerous factors. This can include a good credit history (generally with a credit score of 700 or higher), the applicant’s age and employment status, regular monthly income, etc. In further detail, let’s take a look for pros and cons of what a personal loan brings to the table: The Pros of Personal Loans - Collateral Free: If someone wants to take out a personal loan, they wouldn't have to lay down any of their personal or business assets as collat...