Glittering Opportunities: The Gold Loan Industry Unveiled
Introduction :-The Gold Loan industry, often referred to as the "sunrise sector" of the financial services industry, has been gaining significant traction in recent years. Combining the allure of gold with the accessibility of financial assistance, gold loans have emerged as a lifeline for many in times of financial need. In this blog, we will dive into the fascinating world of the Gold Loan industry, exploring its growth, benefits, and impact on individuals and the economy.
The Sparkling the concept of Gold Loan
The concept of Gold Loan is not new in India. People have always pledge gold ornament for financial needs. In olden days people use to pledge gold to jewelers, Money Lenders and Land lord. But today
it has changed people have more option to pledge gold in N.B.F.C and Banks.
1) Liquidity and Accessibility :- Gold Loan is easy to access and gives immediate liquidity to Borrowers. It is easy to get Gold Loan compare to other Loan.. Gold Loan requires minimum documentation, minimum time period and with in few hours you get the loan.
2) Asset Utilization :- Unlike traditional loan gold loan is backed by gold. Thus asset is utilized
in the form of Gold.
3) Lower Interest Rate :- In Gold Loan interest rate are lower compare to other loan. Thus making easy for the borrower to take loans
How Gold Loan Work
1 Appraisal :- The first process is appraising the gold jewelry. The Borrower bring gold jewelry to Lender. Then lender appraise the weight, quality, carat, and Purity. According to appraising result the
gold loan is fixed.
2) Documentation :- There is minimum documentation required for Gold Loan. It include identification documents like Adhara card, Pan card, etc.
3 Loan Disbursement :- After Appraising the Gold and document, The lender fixes a percentage to borrower. If borrower aggressive to it then loan is disburse.
4) Repayment :- The Borrower agrees to Pay back the loan at fixed tenure. If the borrower fails then gold is auctioned.
Benefit of Gold Loan industry
There is lot of benefit for gold loan industry is giving to our economy and Borrower.
1) Quick access to fund :- There is quick access to fund to borrower in gold Loan.
2) Lower Interest rate ;- The interest rate is lower in gold loan compare to other form of loan like credit loan, personal loan etc.
3)Asset Preservation :- Borrower retain there gold after payment of there gold loan. Thus giving borrower other chances to access to gold.
4)Financial Inclusion :- Gold loan has helped wide range of people to financial aid that they don't get in other form of loans. thus including them in financial inclusion.
Challenges and regulation in Gold loan industry
While Gold Loan has given many benefit. It is one of the most regulated industry by the government. It face Challenges of fair lending, transparency, lending process, fake gold pledging etc.
The R.B.I has set many rules for gold loan. Thus to protect the interest of borrower.
Conclusion
In conclusion we can say that Gold Loan industry is emerging industry. It has helped to grow Indian economy faster. It gave financial inclusion to many individual, small scale business to get loans. As this industry continues to grow so its gives power to individual to use there potential of gold to get loan in hard times.
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