The Indian economy is returning after a pandemic, and the credit market is again generating news. The emergence of gold-focused NBFCs has been well-documented in the media during the previous decade. NBFCs like Bajaj Finserv gold loan are now primarily credited for formalizing an industry that had previously been the domain of shady moneylenders who operated outside of governmental scrutiny.
Banks were primarily disinterested in gold loans, leaving unorganized players a free hand until gold loan NBFCs challenged their supremacy. However, both commercial and state institutions are aggressively pursuing gold loans these days. Apart from the apparent gold loan benefits, the finest gold loans are in high demand due to several circumstances in the epidemic’s aftermath.
Gold prices are pretty high
The high price of gold is one of the essential elements fuelling the demand for this kind of credit instrument. Price increases are being seen across the board for this yellow metal. As a consequence, a more significant loan amount may be accessed.
Easy-to-follow qualifying criteria
The ease with which credit against gold may be obtained is another element contributing to its appeal. This credit instrument is often available to anybody over 21 who owns gold.
In addition, to be eligible for this credit instrument, one must fulfil the monthly income criterion. Furthermore, a strong credit score is not required to get this financial instrument. As a result, people with bad credit or a poor payback history may qualify for this credit.
When describing the benefits of a gold credit, the appropriate interest rate must be mentioned. This financial instrument offers a reasonable Bajaj Finserv gold loan interest rate compared to unsecured competitors with identical features. As a result, borrowing costs are kept low, making it easier for people to repay their debt.
The sector that is organized
In recent years, there has been an increase in lenders and credit unions venturing into this market due to high demand. As a result, several lenders are active in this market, providing various services.
These lenders are also regulated by the RBI and other regulatory organizations, ensuring transparency. Misconduct such as charging higher interest rates or implementing less favorable loan conditions will be reduced.
Easy application and fast pay-out
The ease with which this financial instrument may be applied and disbursed is another element contributing to its growing popularity. A Bajaj Finserv gold loan is often paid within a few hours. Following submitting an online application, a lender representative will call the applicant to check papers and a gold assessment.
They will get the loan amount after this procedure is completed. Additionally, online gold loan companies provide doorstep services, allowing consumers to apply for loans without leaving their homes. To finish loan processing, an executive will pay a visit to the applicant’s home.
As a result, it lowers the inconvenience of visiting a branch. There are a number of additional vital elements that enable the best gold loans to have an impact on the country’s borrowing landscape.
What makes a gold loan NBFC successful in a market flooded with banks?
Customers benefit from the services provided by gold loan NBFCs. On the other hand, gold loans are simply one of the many lending options available to banks. As a result, unlike gold lending NBFCs, banks do not take a targeted strategy to gold loans. In addition, NBFCs have greater market penetration, particularly in rural regions, which banks do not serve.
Moreover, gold loan NBFCs provide greater service efficiency such as faster response times, appealing programs, ease, and disbursements. NBFCs outperform banks when it comes to gold loan product innovation. Long-term gold loans, like ours, are an example of innovative products that have changed the traditional story of gold loans.
Will the increased competition in the gold loan market change things?
The organized gold lending sector accounts for a mere 5% of the total gold loan market. Because of this, structured gold loans are likely to spread into an unorganized gold loan market. Increased market penetration and global expansion are fuelling the growth of the gold loan industry. As a consequence, the structured gold loan segment’s expansion horizon, as well as competitiveness, are expanding. Because of their excellent customer service, a wide range of products, and ability to provide a specialized service, gold loan NBFCs will remain a dominant force in the market.
Another factor was that rare lockdowns had a less severe effect on the organized sector, with a considerably wider digital reach and capability. Corporations in India have shown more significant profits than projected in the lockdown-affected quarters, despite no increase in sales, due primarily to the cost savings offered by their digital reach.