Gold Price: Buying gold in India is associated with tradition. For generations, Indians have been investing in gold and use it when needed. Many people or small businesses take loans in lieu of gold to meet their immediate needs. For some time, the jump in India’s gold loan market continues. But it is also important to pay attention to this that if gold prices are low in future, will it be the right decision to take a gold loan?
Gold loan increase
Many NBFCs and banking institutions like Muthoot Finance have increased the gold loan. According to the report of PVC’s strike Gold the Rise of India’s Gold Loan Market, the rising price of gold has increased in the gold loan to meet the financial crisis and small business needs. It is being said that in the year 2023-24, gold worth Rs 7.1 lakh crore will be doubled by 2028-29 to Rs 14.19 lakh crore.
Competition to take gold loan
Muthoot Finance MD George Alexander Muthoot says that the number of customers taking gold has increased in the last few quarters. In the last few quarters, more than 13 lakh new customers have taken gold loans. There are many reasons behind which, such as a personal loan or other loan, its EMI is easier, it processes quickly and does not have long -term liabilities.
Gold prices are unstable
Financial experts say that gold loan can also be risky as gold prices are further stable. Gold prices depend on currency status, geo political stress, decisions taken by the central bank and interest rates.
Gold loan impact on customers due to low gold prices
If the price of gold is low, then it can increase the price ratio from the loan. Due to this, customers taking loans may have difficulty in repaying it. These options may provide liquidity but can increase the improvement risk in the market.
