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.