Along with China, India is one of the leading importer and consumer of gold. Indians consider gold as auspicious and even find it as a very good source of investment. In India, people have marked special days on which they definitely buy some amount of gold. Gold is a highly liquid asset and a commodity with constant value appreciation.
The emotional value attached to the gold article bought makes people hesitant while selling it for meeting their immediate financial requirements and this is the reason why people prefer taking a gold loan. This way they are sure that their gold articles (ornaments or coins) will be safe with the banks or NBFCs (Non-Banking Financial Companies) and they can still tackle their cash crunch.
Over the past few decades, the gold and gold loan market in India has observed a considerable shift in its scenario. The demand for gold and gold loans is leaping every once in a while. Way back in time when people used to exchange their goods with others in order to procure essential goods needed for their survival, which we commonly known as a barter system, laid the foundation of loan. Globally the idea of lending money came from the pawnbrokers, who used to give money against collateral, centuries ago. In India, the rise of gold loans started from the southern region of the country where the landowners and money lenders provided the local villagers with money against their gold ornaments and coins.
Since then, the gold loan market is growing continuously and the awareness among borrowers regarding the gold loans has also increased. Many banks and NBFCs (Non-Banking Financial Companies) have provided the borrowers with many offers, for instance, the HDFC gold loan is one of the most feasible policies.
Borrowers are now more attentive towards the policy to opt and they weigh their gold loan interest rates and gold loan per gram rate very thoroughly before taking a loan.
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