According to estimates, the organised gold loan market as of Jan 2022 is worth Rs. 4,149 billion and is predicted to increase at a CAGR of 19.5% over the next three years, reaching Rs. 7,557 billion by FY2024.
People in urban, semi-urban, and rural areas have found gold loans to be an effective way to meet their monetary and liquidity needs.
Gold loan is becoming more popular as a result of their rising presence, faster loan processing capabilities, various tenures, gold loan availability at the doorstep, digitally integrated solutions, etc.
The advent of digital platforms in the gold loan business has opened up untapped sections of the gold market. The digital model will be able to accommodate thousands of clients at once.
Due to less paperwork and a faster verification process, digitisation has played a critical role in the rise of loans such as gold loans.
However, before taking out an online gold loan, there are a few things to think about.
Factors to Examine Before Taking a Gold Loan from a Digital Lender
A few factors that can be considered are:
1. Examine the Digital Lender’s Credibility
In the market, there are various distinct sorts of online gold loan schemes.
To receive the best deal, an individual needs to compare several digital lenders. Before making a final decision, they must also investigate the lender’s credibility.
Muthoot Fincorp, one of India’s most well-known and trustworthy gold loan firms, can provide a gold loan promptly.
2. Interest Rates and Other Charges
For an online gold loan, different lenders charge varying interest rates.
Thus, before borrowers choose a loan, they need to ensure to compare interest rates.
People can receive a digital gold loan from Muthoot FinCorp with interest rates starting at only 11.99% p.a.
To choose the best loan, applicants need to inquire about the lenders’ extra fees.
Lenders may charge a foreclosure fee or processing fees for processing the digital gold loan application.
There are no foreclosure charges with Muthoot FinCorp if one repays the whole loan within three months, and the processing fee is similarly low, ranging from Rs. 20 to 0.25% of the loan amount.
3. Eligibility Criteria
The eligibility conditions are one of the most crucial things to examine before taking out a gold loan. The eligibility requirements for various digital lenders will vary.
With Muthoot FinCorp gold loan, individuals can rapidly meet the eligibility conditions as they have been created, keeping the customer’s interests in mind.
To receive a favourable deal, borrowers need to review the documentation that a lender requires. The documentation requirements for a gold lending scheme are usually minimal.
4. Loan Disbursement
Another thing to think about is how quickly and easily the loan will be disbursed.
Techniques like e-KYC, e-documentation, and doorstep valuation are used by digital lenders, resulting in a quick payout.
Obtaining an online gold loan is simple with Muthoot FinCorp. The required gold loan is processed within 30 minutes after the applicant submits the documentation.
5. Repayment Mechanism
Applicants need to think about their repayment choices before taking out a gold loan.
Different digital lenders will offer them different repayment alternatives; they must choose the one that best suits their needs.
With Muthoot FinCorp, the ease of application and the flexibility of repayments benefit every gold loan applicant.
6. Customer Service
In addition to the convenience of a digitally obtained loan, a real-time customer care mechanism is required.
Receiving interest payment reminders via email and SMS is a crucial thing that good digital lenders keep in touch with.
The borrower’s journey, from the first time they contact a platform to the time they repay their loan, maybe a smooth one if a robust customer care mechanism is in place.
Gold loans are a popular alternative to traditional banking and are often tapped by those in urgent circumstances.
Those looking for a speedy and convenient loan can choose to forego traditional financial institutions and opt for a digital lender that offers a digital gold loan.
Further, when it comes to obtaining a loan against gold, it is critical to consider all the alternatives and select the best gold loan scheme for one’s needs.
Individuals also need to carefully examine the terms and conditions of the gold loan to ensure that they are aware of all costs and fees.