Why Is Competition Increasing For Gold loan NBFCs?

With the recent pandemic rendering many people jobless, the demand for loans against gold surged. Know the various other factors for increase in competition here!

24 Nov,2022 10:32 IST 1948
Why Is Competition Increasing For Gold loan NBFCs?

The Indian culture places a high value on gold. In times of crisis, people depend on it for immediate financial assistance. However, lately, the demand for gold loans has increased significantly, courtesy of the COVID-19 pandemic.

All NBFCs are aware of the surge in demand for gold loans. Therefore, they are improving their services to keep up with the increasing competition.

Top Reasons For The Demand For Gold Loans

1. Loss Of Employment

The pandemic slowed down business turnover and caused many job losses. At such times, gold loans provided a means of securing one's livelihood. This loan type offers a shorter processing time and lowers interest rates than other secured loan options, helping people fulfil their daily needs.

2. Easily Accessible Capital

People apply for gold loans primarily for quick access to funds. Since they are secured loans, it’s less risky for the lenders and easier to obtain for borrowers. You can get low-interest financial assistance with a click by pledging gold as collateral.

3. Investment Opportunities

Individuals can get funds to start a business online with a gold loan. This way, their gold enables them to manage their finances independently.

4. Rising Gold Prices

As gold prices rise, so does the amount which one can borrow. Hence, people are more likely to turn to gold loans when they need higher loan amounts.

Features NBFCs Provide To Compete With The Rise In Demand For Gold Loan

• Quick Processing:

NBFCs offer gold loans almost instantly to make them more accessible than their competitors. As it is a secured loan, lenders can provide loans with minimal documentation without much risk. If the borrower defaults, the lender can sell the gold.
Get Gold Loan at the comfort of your home
Apply Now

• Zero Processing Fees:

A significant advantage of gold loans from NBFCs is that the processing charges are minimal.

• No Income Proof:

Since gold is collateral, most NBFCs do not require income proof when you apply for a gold loan. All you need is valid KYC documents.

• Lowest Interest Rates:

NBFCs offer competitive rates compared to other financial institutions. Some NBFCs have interest rates as low as 7 per cent, giving them a competitive edge.

• Minimal Foreclosure Fees:

Many NBFCs do not charge foreclosure charges on gold-backed loans or charge a minimum of 1 per cent, distinguishing them from their competitors.

• Physical Gold Security:

Gold loans are safe with NBFCs, which offer gold asset insurance.

Get A Gold Loan With IIFL Finance

Gold has proven beneficial for borrowing money when facing financial hardships. IIFL Finance offers various gold loan schemes. You can walk into any of our branches across India, complete the e-KYC process within five minutes, and receive your funds within 30 minutes. You can also get gold loans through IIFL website or app and receive cash within a few hours.

FAQs

Q1. How do you qualify for a gold loan?
Ans. Gold loans are available to anyone between the ages of 21 and 70 with gold assets to pledge. Unlike other loan types, this loan does not have strict eligibility requirements.

Q2. What is the current gold loan interest rate?
Ans. A wide range of interest rates is available for gold loans. They primarily vary from 7.35% to 29% per year.

Get Gold Loan at the comfort of your home
Apply Now

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

Most Read

Check the Difference Between 24k and 22k Gold
18 Jun,2024 09:26 IST
67241 Views
Like 8253 8253 Likes
Franking and Stamping: What’s the difference?
14 Aug,2017 03:45 IST
47764 Views
Like 9588 9588 Likes
Why Gold Is Cheaper In Kerala?
15 Feb,2024 09:35 IST
1859 Views
Like 6154 1802 Likes
Personal Loan With Low CIBIL Score
21 Jun,2022 09:38 IST
31149 Views
Like 8575 8575 Likes