How IIFL Finance is transforming the online gold loan market

A gold loan is a simple and secured financial product where one can borrow money by placing one’s personal or family’s gold jewellery as collateral with a lender. One can borrow money from either banks or reputable non-banking finance companies (NBFCs) such as IIFL Finance by pledging their gold jewellery.

IIFL Finance has built a strong base for itself through the years. It has widened its pan-India reach through an extensive network of branches spread across the country and various digital channels to reach out to customers. It has also expanded its product suite and tailored the offerings to the demand from customers.

The gold loan process

The basic process for taking on a gold loan is the same across all lenders. Here are the main steps:

1. A borrower owning gold jewellery approaches a financer.
2. The lender values the jewellery based on the market price of gold and offers the maximum amount possible.
3. Based on the borrower’s choice, whether it is the actual loan amount or the time period for repayment, the lender then customises the rate of interest for the loan.
4. The borrower can then choose to avail the loan against their jewellery as a security.

The difference between lenders lies in how the gold loan process is offered. Most lenders follow the traditional way and the borrower has to visit the branch of the bank or the NBFC with their gold jewellery for applying as well as valuing the jewellery. However, borrowers now also have the option of taking an online gold loan.

What are digital gold loans?

Digital gold loans can be of two types.

Digitised gold loan:

In simple terms, it is associated with the process of availing a loan. Owners of gold jewellery can avail a loan against the value of product through a digitised process. One can apply online and request for a lender’s representative to visit the borrower’s chosen location at a convenient time. Once the terms of the loan are agreed upon, the money is transferred digitally to the borrower’s bank account.

Loan against ‘digital gold’:

This refers to a loan against ‘digital gold’, or loan against a certified digital note that says one owns a given amount of gold even if one doesn’t hold the yellow metal physically. This is an emerging sector, much like the saving-cum-investment product of ‘digital gold’ itself.

How is IIFL Finance digital gold loan different?

Taking a digital gold loan from IIFL Finance is a very easy and convenient process that can be completed online within a few minutes. Here are the main steps:

Step 1: Fill the online form.

Step 2: Keep identity and address proof documents at hand.

Step 3: IIFL Finance representative calls and comes to the address.

Step 4: The representative uses certified tools to weigh the jewellery and give an instant valuation, depending on the purity of the gold, and the maximum loan one can avail.

Step 5: Based on the amount of loan and the tenure a borrower opts for, a gold loan rate of interest is offered.

Step 6: If agreeable, the loan is sanctioned and instantly transferred to the bank account of the borrower.

Step 7: Borrower can top-up the loan, renew existing gold loan and repay the loan online.

The process is hassle-free and 100% digital. In comparison, some other gold loan companies that also offer digital gold loans, limit the digital aspect to only the initial application.

Key features of IIFL Finance digital gold loan

IIFL Finance digital gold loans allow borrowers to get a disbursal right at their doorstep. Here are the main features of IIFL Finance digital gold loans.

1. Gold loan approval in few minutes and disbursal after the loan approval.
2. Short term tenure.
3. Gold loan amount starting from minimum amount with no maximum limit.
4. Gold pledged is insured and secured in vaults.

Conclusion

Traditionally, borrowers had to visit a lender’s branch to avail a gold loan and pledge their jewellery. And that’s how most lenders operate even today. But the entire process is now going digital.

While some gold loan companies only limit the digital aspect of a gold loan to filling the application online, IIFL Finance offers borrowers a fully digital process to avail a gold loan at home sitting at the home.

IIFL Digital Gold Loan product makes it a hassle-free and fully digital process for the borrower. Unlike standalone gold loan companies and most banks that expect consumers to still visit their branch, IIFL Finance has taken the service right to the customer’s doorstep with a truly digital product.