Gold Proved To Be Lifesaving For Banks During Corona Period

It was pretty obvious that without income people were hesitant to invest their money anywhere and as people stopped investing, the loan processes stopped but in these times gold loans stood out and helped banks and people to float through the high waves and survive. And during these tough times, every organisation, the institution has suffered, including banks. It was like a vicious circle in which everyone was trapped. People stopped taking loans due to these shortages of money and did not invest it anywhere.

But how come when people were not taking any other types of loans, they were still taking gold loans? Here’s the reason for it, as we know that gold loans are short term secured loans that means that they can be taken for some time with flexible terms and conditions and can be the best option for having fulfilled the immediate need for funds. So, it can be used for the best use for both banks and the people fighting through these tough times. Despite this, there are many other benefits of gold loans.

Let us discuss some of the other benefits of gold loans to have a better knowledge of these, as given below -

Credit score: 

As we know that it is important to have a good credit score equivalent to 700 or above if you try to apply for any loan, but if we talk about gold loan it does not carry a lot of value because they are short term secured loans that require a collateral to be deposited and usually it is opposite in case that of gold loans, people opt for gold loans to improve their credit score. A not very good credit score can be covered in gold loans as collateral plays a major role. That is why banks and lenders don’t really look up the credit score.

Repayment tenure: 

The gold loan is as we know a short-term loan, and its repayment tenure is also accordingly short only, ranging from 3 months to 3 years depending on the loan agreement between the borrower and the bank or the moneylender. The tenure should be fixed keeping in mind the Gold Loan Interest Rate so that there is ease in paying the monthly instalments. The lenders might extend the tenure if you tend to have good relationships with the bank or lender. So, you should consider all these points before opting for any one bank or lender.

Processing fees: 

Most of the banks and lenders don’t charge any processing fees while the other banks and money lenders keep their processing fees quite less and transparent, it can be up to 1%-2% of the total amount of the loan, while some might charge a certain percentage of the whole amount of loan whereas others might charge as low as ₹10 onwards, therefore one should first compare, negotiate and then make the decision of selecting the bank or lender offering the most convenient processing charges as even the slightest change in processing fees can make your whole amount of gold loan change significantly.

These are the benefits that gold loans offer to the customers and the banks and lenders and therefore we can say gold proved lifesaving for banks during the corona times.

If you have heard a little about gold loans, you must have heard about Gold loan by IIFL.They are famous for their services in the line of gold loans as they have been continuing to offer their customers a trustworthy service with a lot of schemes that make it more attractive for their customers. They offer gold loans with a flexible tenure, a rate of interest that suits everyone’s needs and desires. They have been known for delivering such services for years. They offer loans with minimal documentation and transparent processing fees which makes it easier for people to rely on them.

Advantages Of using A credit card

 

Credit cards have more than many advantages for users these days. It is the most convenient mode of payment. One can apply for credit cards at almost every bank and non/banking financing companies(NBFCs). The demand for credit cards is increasing every day. The documents required for availing of credit cards are address proof, identity proof, employment proof, salary slip, income proof, income tax documents, good credit history and score and many more as demanded by the financing institutions. With the growing economy credit cards have become a necessity for all. 

Credit cards have changed the purchasing power of a person. It has emerged as one of the most beneficial financing tools. It is a type of payment against the line of credit. A credit card allows you to purchase a wide variety of things and pay later for them. Credit card bills can be paid monthly through EMIs. It has helped you to finance a wide variety of goods and services. If used responsibly it can be of great help to the user. 

Bank Of India credit cards can be applied easily online as well offline. The bank offers a very attractive interest rate on credit cards. The credit card bills can be repaid in monthly installments as per the convenience of the users. The bank offers various credit card options as per the convenience of the users. For more information, one can visit the online website of the bank. 

A Credit Card can be very much useful for people as it has various advantages. Some of the advantages of using a credit card are listed below:- 

• Paying for purchase over time:- You can purchase the items you want and pay for them later. The credit card bills can be paid later as per the convenience of the user. Carrying a credit card in today’s time has made a lot of things easier. 

• Credit card rewards:- By using a credit card we can earn so many rewards and also cashback. These rewards can help us save a lot of money. It is the biggest perk of using a credit card. 

• Fraud protection:- Credit cards provide us with fraud protection. It is safer than any other card. It offers Virtual account numbers you can use while making over-the-phone or online purchases.  The virtual account number is provided for safety. One can easily use a credit card as it very much safe and secured. 

• Travel benefits: Many credit card also provides extra travel benefits. It provides a handful of features that can help you save money the next time you're traveling. This feature might include auto rental collision damage waiver, trip cancellation or interruption insurance, baggage delay insurance, trip delay reimbursement, free airport lounge access, a free checked bag, travel statement credits and many other travel benefits. 

• Return Protection: This policy may enable you to return your purchase for a refund even when the retailer doesn't allow it. This benefit can be used while purchasing. It usually lasts up to 3 months depending on the financing company you choose. 

• Credit Score: Credit card help you to increase your credit score. If you have a good credit score you can also avail loan on your credit card in future. The credit card helps you in maintaining a good credit history. 

• Universally accepted: One of the major advantages of using a credit card is that it is accepted universally. One can use a credit card worldwide. It is the easiest and convenient mode of payment. 

Conclusion

A credit card has become one of the most popular modes of transactions in modern times. It has various benefits to offer to its users. People are preferring credit more than other cards these days. There are various perks of using a credit card. Experts believe that in coming times credit card will be the most used card. As it is a financing card it has increased the purchasing power of the user. A credit card can be applied for in almost every banking sector and non-banking financing companies(NBFCs). For more information regarding credit card, one can check the online website or visit the nearest financing company. 

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Gold Loan Spike In Market

The precious metal gold has a unique and essential feature due to which it is one of the best metals of human beings. Starting from the use of the medical fields to that of the technological and the financial sector, gold has its importance in almost all sectors. Most of the houses in India, which covers about 80% of the total population, have gold in jewellery and coins. The gold loan has a unique feature as it acts as a stabiliser during a financial crisis like that, which is happening in the world.

Gold has a value that the goal itself has managed to preserve. In contrast, the prices of other things have fluctuated a lot. During this financial crisis, worldwide is facing a significant issue in maintaining the economy's stability. During this period, having the gold will help you remain safe as it will act as a hedger in this uncertain time. Nowadays, Muthoot gold loan is offering a low rate of interest to fight this crisis. The gold prices fluctuate but are in a pretty stable position in the stock market and the commodity market, due to which when the prices of the gold rise, people sell the gold available to have a good profit in the deal.

During international trading between countries like the US, UK, Russia, Australia, China, India, and France, gold is significant. Several requirements like that of technological development and utilisation like that of gold are used as a protective agent against heat in the spacesuits for the different space research agencies of the world. For maintaining the government reserves of the country to stabilise the economy and maintain the balance for any situation, gold reserves in the form of gold are required for which the trading is very much crucial from one country to another. When there is any difference in appreciation in the base currency on which the training will be done, the problem will negatively impact the home currency, which will depreciate. This is one of the significant reasons that during this time of the financial crisis and imbalances all over the country, every country is concerned about maintaining the stability of the economy.

If we look into the other scenario, we will find out that gold has an indirect relationship. When the rate of interest of several things falls, the people break the several types of deposits. With this broken deposit amount, they find it better to buy low gold following this friend's demand for the gold increases, raising the price of the gold in the market. They understand that when the interest rate is increasing and at that particular time, the selling up of the gold available will be a good option and provide a profit.

The traditional and cultural aspects in the Indian market about gold are very much different. Gold is used in the form of jewellery, especially during the time of the festivals. As people buy more gold during the festival season due to which the demand increases, and in return, the prices also get a positive effect to have an upward trend in the price graph.

The import and export between the countries are vital regarding the gold production and the international trade of the gold. Our country India contributes about 1% of the output of gold in the world. Still, on the other side, it imports a lot of gold to meet the different kinds of requirements for which the demand for the gold increases and for which the cost of borrowing also increases for which the gold rate increases.

Conclusion

Gold is also required in the medical uses to treat diseases like cancers and have found some traces in the initial stages to be fruitful in curing the patients. It is expected that further in future as more research and procedure will be developed and the use of the gold rice seeing the present scenario of the betterment of the treatment and the studies. To conclude, we can say that there are several types of financial risk like that of impression, in which gold is the only option that will save from any economic instability.

Good Quality Gold Fetch Larger Gold Amount

Relation of CIBIL score with Gold Loan

CIBIL score is the types of scores that can be treated as an individual’s credit score regarding the past performances done in the credit financing helps and the loans already availed. It shows the trend and the intention and pattern of the repayment done by the customer in the past performances and based on which the banks and the financial institutions will examine the loan profile of the customer and decide whether the loan should be given. Helps people to know about and remember what he or she has done.

Transunion CIBIL is a company that provides the credit of the CIBIL score of millions of millions of people. It is a three-digit score which states and expresses all the information related to the trade transactions done in the past. A CIBIL  score is mainly made up of four types of components that consist of or should have a balance of specific calculations like that of the history of the repayment done inverse and contributes about 30% of the total CIBIL score credit exposure about 25% of the total CIBIL score. The credit type and the tenure of the loan period will contribute about 25%, and the other factors will contribute about 20% of the total CIBIL score. Among the first and foremost factors that will influence the CIBIL score is making the payment. For example, Mannapuram gold loan offers such facilities and criteria, making the people have a hassle-free loan procedure. Many people present in the world need a particular reminder response to understand that there is a due date on which the person is entitled to pay some amount, while most people forget that there is due date or neglect it. Many people have a credit card and are unable to manage the dues at the same time. Keep that prompt to their students for all the things you can get and advances in applied if they require.

There is no positive or direct relationship between the CIBIL score on the gold loan. It is good that there is no relationship because in most cases, it has been found that in the types of loan as that of the home loan or the car loan, there is always a requirement of collateral security. Collateral security is required in case of the secured loans where the bank makes a backup if the customer cannot pay for others in the loan procedure. This is not the case with the gold loan. AWhilevailing of the gold loan, a person is not required to produce or show any kind of credit report and the loan provider also not required to examine the credit are the CIBIL score. The gold loan calculator on the official websites will give a better estimation. The reason is that the gold itself will be acting as collateral security. There is no risk of repayment because of any kind of issue that arises in the future. The customer cannot pay or surrender the loan amount, then the bank has the complete freedom to resale the gold and recollect the excess amount of the loan and return the balance to the customers.

There are many businessmen or people who want to start a small scale business as a startup. They will not have to show any document except the proof of address, proof of identity and the gold ownership document. In the case of the other loans, there will be a compulsory need for the documents related to the business, the documents related to the business’s land, or the people who will be involved in the business.

Conclusion

There will be the requirement of showing proof of income such as salary slip for IT return file in case of the business professionals. In those cases, the CIBIL score is also checked, but there are no such requirements in the case of the gold loan. This is why there is no relation between the credit score and the gold loan. But indirectly, they are related because if anybody is not having a good credit score and wants to avail a high amount of loan idea for having a car or having a home. In such cases, it will be advisable to avail of a gold loan because the gold loan does not require trade good, but if the repayments are made based on small EMIs, then the credit score will become good after the payment.

Read More:- Top Indian Banks/NBFCs Providing Gold Loans

Gold Loan Acquirance

A gold loan is a secured based loan that may be used to keep a valuable gold mortgage for acquiring cash. In the case of an emergency, its fast availability makes it the most preferred borrowing option. 

How does a gold loan save you money?

A gold loan is a loan obtained from any bank or non-bank financial institution. Unlike personal loans, it necessitates a great deal of attention and authentication, is saddled with a great deal of paperwork, and simultaneously tests the patience of both borrowers and lenders. In order to compare gold loans to other loans, a legal framework of paper and confirmed assets with quality assurance is required.

The most important question remains unanswered: does a gold loan save you from significant expenses? When comparing gold loans to unsecured loans such as personal loans, the interest rates are lower, and you have more alternatives for repaying the loan amount when you take out a gold loan.

How is the amount of a gold loan calculated? 

The amount of the loan is calculated based on the type of security that is offered. The maximum loan amount you may acquire against a gold product at any given moment and date is determined by the weight and current market value of gold. Other factors, such as the type of gold and the borrower's repayment capacity, are also considered. Gold loans are an excellent opportunity to meet emergency financing needs. For loans from financial institutions or banks, gold loans may be more preferable to personal loans.

Eligibility and documentation are necessary.

Someone who has gold ornaments may apply for the loan. Only people of legal age, i.e. above 18 years, are considered for it.  The qualified individual can use the loan by submitting a piece of gold jewellery in the karat range of 18K to 24K to the branch. Send a piece of gold jewellery in the 18K to 24K karat range to the branch for a purity test. One can take advantage of the loan; only the gold is eligible for loan approval. As the loan is secured against a gold fortune, no proof of income is required. Therefore, only basic KYC documents are required to apply for the loan: passport photos, proof of identity, and address.

What Are the Perks of a Gold Loan?

Minimum Interest Rates- Interest rates are a pertinent factor when applying for a PNB Gold loan. The interest rate may be lower than forms of loans as collateral is involved only. As you'll be giving your gold to the lender, they will take a considerably reduced risk in granting your loan. And it is for this reason that interest rates are prominently high. 

Simple and reliable borrowing- In today's date, everyone is in a rush and wants to acquire a loan as fast as possible, and a gold loan may be the ideal alternative. You simply need to submit your gold jewellery to the bank to apply for this loan, and you might have the money in your account pretty shortly in a day’s time or sometimes just a few hours. The bank will analyse the worth of your gold and decide on a loan amount. The bank will examine the worth of your gold and determine a loan amount, and upon completion of paperwork, it will get approved.

Loan-to-Value Ratio Increased- The loan amount is the most significant element to consider as it will meet all of your objectives. A gold loan can give you a loan sum of up to 90% of your total gold worth, with a minimum of 65%. Let's look at an example to assist you to understand. For instance, if the entire worth of your gold is INR 10 lakhs, you can only acquire a loan of INR 9 lakhs, and The minimum loan amount would be INR 6.5 lakhs.

Compared with other assets- As an individual, one doesn't have to worry about your investment when buying physical gold safely because it will not fluctuate too much in the market. If you compare the gold rate today with interest, you will find that it is more or less stable than other options in the market. Even after many years, your gold still has a good market value and can provide you with adequate future security, making it the most suited option for availing of a loan. 

 Also read:-  Looking For Short Term Gold Loan