This is a Guest Blog by Mr. Vijay Malhotra, Chief Sales Officer & Co-founder SahiBandhu
Financing big purchases can be a daunting task. While the complex world of credit instruments has not been easily accessible for long, the landscape is gradually changing. The rise of India’s fintech industry is revolutionizing credit availability for millions of consumers by simplifying application processes, shortening approval times, and making the system more transparent. Gold loans have gained significant popularity as a convenient and efficient financing option.
Regardless of how well we manage our finances, there are instances when we require quick funding. It could be for buying a house, a car, or purchasing additional equipment for business. In recent years, the gold loan has become a feasible financing choice for many in times of dire need. Financial technology firms are actively expanding the market for gold loans in India’s present digital economy through automated processes, quick approvals, and minimal documentation. Given the high EMIs associated with personal loans under the existing paradigm, gold loans have proven to be a more advantageous alternative. Let’s look at the key reasons why gold loans are becoming the go-to financing option for people:
Flexible eligibility criteria
When applying for a loan, many people are concerned about their eligibility. A gold loan is a relatively simple process because anyone over the age of 18 can obtain one. And the CIBIL score prerequisites of the borrower is not applicable. Since the loan is granted in exchange for the gold held as collateral, people from all walks of life, including homemakers, college students, business professionals, and others, are eligible if they can repay it.
Fast and easy disbursal
Long waiting time for loans has been a concern for many over the years. Since gold loans are secured loans, the approval process has gradually become quicker and more straightforward, with more fintech platforms coming into the picture. They ensure smooth onboarding procedures and a seamless disbursal experience for borrowers. As long as the borrower has sufficient gold to offer as collateral, the loan can be approved in a matter of minutes. This, in turn, has made gold loans one of the simplest and easy-to-access financing options available in the market.
Low-interest rates
Personal loans and other unsecured loans usually carry hefty interest costs. Recent changes in the global economy have seen increased interest rates, making interest payments expensive. The interest rate is substantially lower for loans secured by gold, fintech aggregator platforms like SahiBandhu offer gold loans starting at just 8.5% annually. Furthermore, rising gold prices in the market also give borrowers the option to benefit from a decrease in the interest they pay, and as a result, gold loans give people a chance to manage their money more effectively.
High-value loans
Obtaining a large sum of money on short notice might be difficult. In such situations, gold loans are a viable option for business or personal use since they provide substantial financing within short periods. Gold loans have no maximum disbursement amount. Banks/NBFCs can easily accept the loan request as long as the borrower can furnish the requisite security in the form of gold.
Flexible repayment plans
One primary reason people prefer gold loans is the repayment flexibility they provide. Banks and NBFCs offer multiple repayment options like paying regular EMIs, partial payments, etc. Borrowers can even pay only interest initially and the remaining balance at the end of the loan term. Neither banks nor gold loan companies impose foreclosure penalties, making gold loans even more appealing.
Final Word
Overall, using a gold loan to finance large expenditures can be a wise decision. It’s a financing option worth considering because of its low-interest rates, quick processing, flexible payback alternatives, and asset security. Among the numerous loan alternatives accessible today, gold loans are one of the safest and most convenient options in times when people need immediate funds.
