With people staying indoors due to the pandemic and the lockdown going into several weeks, companies have been forced to close units temporarily or retrench staff, as the demand for products and services decline. The economic slowdown across the world resulted in a loss of income and a shortage of funds for many. Therefore, to deal with the current crisis, people are turning to one of the most coveted assets to obtain emergency funds.
According to reports, small businesses and entrepreneurs are availing gold loans to restart their business and bridge the financial gap. And since gold prices are scaling robust heights, borrowers can mobilize higher sums through gold loans.
Gold rates go up
The COVID-19 spread has been accompanied by a corresponding increase in the price of gold with every passing week. The following data shows the rates before and after the lockdown was announced on March 25 2020:
Gold rates per gram
- January 1: Rs 3,995
January 31: Rs 4,169
Highest: Rs 4,221 (January 9)
- February 1: Rs 4,169
February 29: Rs 4,368
Highest: Rs 4,394 (February 25-26)
- March 1: Rs 4,274
March 31: Rs 4,253
Highest: Rs 4,563 (March 7)
- April 1: Rs 4,253
April 30: Rs 4,703
Highest: Rs 4,826 (April 29)
- May 1: Rs 4,476
May 31: Rs 4,741
Highest: Rs 4,792 (May 24)
This trend is likely to continue in the coming weeks as investors seek gold as safe-haven investments in these troubled times. So, if you are planning on taking a gold loan, this could be the best time, as the loan amount offered will be as per the market value of this precious metal.
Gold loan advantages
Gold loans are a popular loan choice for meeting short-term business needs for the following reasons:
- Quick processing: Most lenders disburse gold loans with a few hours of submitting the application. Therefore, it is the best option to raise instant funds. In fact, through HDFC Bank, you can avail a gold loan in less than 45 minutes.
- Easy rates: The interest rate on a gold loan is lower compared to other loan options, including personal loans. HDFC Bank, for instance, offers competitive gold loan interest rates.
- Minimal documentation: Another advantage is that the only documents you need are valid identity and address proof.
- Processing fees: This is usually quite minimal. While some lenders might withhold a few hidden costs that could prove to be an unpleasant surprise later, HDFC Bank follows a transparent process and discloses all charges. Their processing fee is nominal at 1.5% plus GST. They also charge a valuation fee of Rs 250 for loans up to Rs 1.5 lakh and Rs 500 for loans above that amount.
- Flexible tenure: HDFC Bank gold loans are available for tenures starting from six months to 24 months. You can choose the tenure and the repayment option depending on your financial situation and business goals.
If you are looking for a way to gather quick finances to tide over the current cash crunch, gold loans are the easiest sources to tap into right now. Apply for Gold Loan today and fulfil your financial needs on your own like business needs, unexpected expenses, and bill payments.
