14-Jul-2020
Muthoot FinCorp NCD bonds June 2020 – Invest 1 Lakh and get 1.6 Lakhs in 5 years – What about risks?Gold is one of the most coveted investments, both in India and worldwide. The yellow metal is a household favourite in the Indian subcontinent for its ornamental uses and a trusted investment source. With a massive domestic holding of 24,000 – 25,000 tons, Indian households top the charts of gold reserves globally.
This age-old propensity for the precious metal has led it to be a trusted instrument in India’s loan industry. Many prominent and reliable lenders have started offering online gold loans with hassle-free documentation to boost gold loan popularity. The organised gold loans industry in India today is a mammoth Rs. 4.61 lakh crore, and it’s only poised to grow at an annual rate of 15 per cent.
So, what makes this entire ecosystem of gold loans tick? Let’s peel off the layers of a gold loan and understand how this popular financing method works.
What is a gold loan & what is the process of applying for a gold loan?
A gold loan is a line of credit extended from a lender, usually a bank or NBFC, to a retail borrower, using their gold as collateral. This deposited gold can be in gold biscuits, ornaments, coins or any other form. The precious metal is deposited with the institution against the loan value, which is anywhere between 60% to 75% of the market value of gold deposited as collateral.
This value of a gold loan against gold collateral is arrived at after considering several factors:
The very fact that the yellow metal enjoys a comfortable market position and is not as volatile as other investments make the process of applying and disbursing a gold loan reasonably simple. There are two ways to apply for a gold loan from a process perspective, an online application and an offline application for the gold loan.
How is the interest rate for gold loans calculated?
The variables that influence a gold loan’s interest rate are the loan tenure and the principal amount. The creditworthiness of the borrower does not have any bearing on the interest.
The interest rate also differs based on the particular gold loan scheme solicited. Special schemes are curated for business borrowers, small-time borrowers, borrowers for personal expenses and even women borrowers.
Almost all banks and NBFCs that offer gold loans also provide a handy gold loan interest rate calculator on their websites.
To know the estimated monthly instalment for a specific loan amount under any particular scheme, you may simply enter the variables, including loan value and tenure to get values for monthly installments. To arrive at the total interest levied, simply subtract the principal borrowed from all the installments to arrive at the total payable interest you have to shell out.
Most gold loan lenders levy an interest rate of anywhere between 12%-24% p.a., based on the loan’s nature. Muthoot FinCorp is a leading gold loan lender in India, helping you meet all your major financial goals with ease. Muthoot gold loan interest rates are an apt reflection of the interest levied by many leading lenders in the market.
Final Words
Gold loans have been a tremendous success in South India, and are slowly but surely seeping into central and north India as a trusted financial instrument. As long as the yellow metal is a permanent feature in household lockers, the Indian gold loan market will continue to spearhead short-term and long-term credit requirements of retail borrowers in India.
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It has been brought to our notice that certain individuals are receiving fraudulent emails, phone calls, and messages, etc, about job vacancies with Muthoot FinCorp and they are also being asked to deposit money in certain bank accounts.
Please be informed that such communications and practices are completely mala fide and sent with an intent to defraud the public and bring disrepute to the goodwill of our Company. Our Company does not ever demand any fee/money against recruitment nor for the application/interview process.
The public at large is hereby cautioned not to be misled by any such communications received through emails, message or any other communication mode.
Please contact us for further information about the genuineness or otherwise of such communications at:
Muthoot FinCorp Ltd.
MG Road, Near Spencer's, Trivandrum - 695 039
Phone: 0471 4911550 / 0471 4911430
Email: [email protected]