Loan on phone, loan on any immovable, movable belongings is a passé the new buzz word is loan on gold.
“Indians are having a passion for gold” and this is obvious from the figures stating that India is one of the largest consumers of gold in the world. Our purchase or passion for gold is not because we consider gold as a safe investment, contrary our major gold purchase is in the form of jewellery and that’s the reason that 90 percent of the gold in India lies with individuals and not with the banks.
Even after purchasing so much of gold in the form of jewellery only 10 percent of it is worn on a regular basis. The rest of it idle, locked up in safes. Companies have spotted the potential and are offerings loans on the gold deposits. Pledging gold is similar to pledging your shares with the bankers and availing a loan on that. But in case if prices of shares pledged goes down, one need to submit additional security for the outstanding loan.
Arguments apart there are no reason of gold price falling drastically in the near future unlike in equity market when nobody imagined the downturn. Still there are equal number of analyst who see a price tag of 2000$ an ounce with equal number supporting a price tag of 800$ an ounce. Read why
With gold price breaking all time high records, there is sudden spurt in the commercials on television and Radio by the companies who are into the business of lending money on gold deposited, as they wanted to mobilize the concept of Gold loan and capitalize on the rising gold price.
This is lucrative business because the default rate is much lower for gold loans as Indians do not want to risk losing their family jewelry. And unlike traditional personal loans, no credit checks are needed for gold loans as a result of which the benefits customer derives is faster processing and lower interest rates. Whatever might be the benefit, but I believe that gold can be pledged for a short term loan or smart decision.
“Indians are having a passion for gold” and this is obvious from the figures stating that India is one of the largest consumers of gold in the world. Our purchase or passion for gold is not because we consider gold as a safe investment, contrary our major gold purchase is in the form of jewellery and that’s the reason that 90 percent of the gold in India lies with individuals and not with the banks.
Even after purchasing so much of gold in the form of jewellery only 10 percent of it is worn on a regular basis. The rest of it idle, locked up in safes. Companies have spotted the potential and are offerings loans on the gold deposits. Pledging gold is similar to pledging your shares with the bankers and availing a loan on that. But in case if prices of shares pledged goes down, one need to submit additional security for the outstanding loan.
Arguments apart there are no reason of gold price falling drastically in the near future unlike in equity market when nobody imagined the downturn. Still there are equal number of analyst who see a price tag of 2000$ an ounce with equal number supporting a price tag of 800$ an ounce. Read why
With gold price breaking all time high records, there is sudden spurt in the commercials on television and Radio by the companies who are into the business of lending money on gold deposited, as they wanted to mobilize the concept of Gold loan and capitalize on the rising gold price.
This is lucrative business because the default rate is much lower for gold loans as Indians do not want to risk losing their family jewelry. And unlike traditional personal loans, no credit checks are needed for gold loans as a result of which the benefits customer derives is faster processing and lower interest rates. Whatever might be the benefit, but I believe that gold can be pledged for a short term loan or smart decision.
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Nice article. Thanks for sharing. I think gold loan is the best option to choose when one needs instant cash. Check more information on Gold Loan.
ReplyDeleteLoan Against Gold is the easiest and safe loan scheme which helps people to obtain instant cash by placing gold ornaments as collateral. The person can get around 90% of the market rate of gold. A person who needs cash and possess gold can apply for Gold Loan.
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