New Delhi, Business Desk. The price of gold in domestic market is touching a record level, seeing that lenders now want to take advantage of this opportunity. Some lenders have introduced new gold loans in the hope that it will become the fastest growing segment this financial year. People are in need of cash to resume their business after the lockdown, they are looking for a loan against their gold jewelery, as gold prices are around Rs 50,000 per 10-gram in the retail market . A personal loan can be taken in lieu of gold. A gold loan is a secured loan and it can be got a cheaper loan, or a loan at a lower interest than the market price.
There is not much documentation in Gold Loan and your credit score does not matter because you are depositing gold first for the loan against the loan. In recent times, there are many gold loan companies and besides these, most banks are also offering gold loans.
Seeing the fast trend in gold loans, now banks have come forward like non-banking financial companies, banks have also started gold loan verticals.
It is noteworthy that during the Corona period a large number of people have lost their jobs or their wages have been cut. A cash crisis has arisen in front of people. That’s why people are taking cash by pledging gold. Since it is easy to get a gold loan, the number of cash takers has increased.
Low risk business for banks
Actually, in the Corona era, banks do not want to take any risk by giving credit card or giving personal loan. Banks feel that gold is the safest security in place of loans, so gold loans are entering the business. Not only private banks, large public banks are also venturing into the gold loan segment, given the increasing possibilities of gold loans.