Gold loans have become increasingly popular recently. The credit surge can be due to the dreaded lockdown and the effect it had on the people of all sectors and economic backgrounds. People have been relying on taking out loans to help themselves with repayments and covering up their financial needs. However, even if the pandemic and lockdown had not struck us, there would surely have been a surge in the gold loan sector.
While people usually associate loans with things like paying off debts, losses, being in financially desperate times loans are not only useful in needy times. A lot of businesses, especially, small scale businesses take out gold loans on their valuables to use that money to invest in their business ventures so that they can buy better assets.
Gold loan per gram is how gold loans are dispersed so people with idle gold at their disposal use it to invest in better assets to further their ventures at a more profitable one.
Not only that, a lot of farmers take out gold loans to buy new and technologically advanced machinery and equipment to yield them better results as this way, the manual labor is saved and the farmers can use that time to work in other related fields of agriculture and dedicate themselves towards a more prosperous lifestyle. Also, keeping in mind the state of our farmers and others working in the agriculture sector, the government has announced several schemes under which they would be applicable to apply for gold loans with the interest rates slashed down to as low as 7% per annum in some financial and banking institutions.
Taking out a gold loan for purchasing assets has been a very old practice amongst merchants and traders as well as farmers to help with their financial advances. Because of their low and in many cases, subsidized interest rates, gold loans become ideal choices for small business owners who can become gold loan owners easily as they don’t have to present an income certificate for the application. Also, they will not be asked to wait for days to get their loan application cleared as the process is fast and the clearance process is somewhat less strict as the loan is secured by the gold deposit which acts as the collateral in the processing.
This is why gold loans would have been popular even without the lockdown situation making the process of lending a little hectic in other cases.
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