How does gold loans business operate in India?

While the likes of Muthoot and Mannapuram have been carrying on the gold loan business in India for a long time, it is only in recent years that most of the banks have also actively started participating in giving gold loans. A gold loan is a loan against the physical pledge of gold. This can either be in the form of gold bars or in the form of gold ornaments. There is a complete assessment done by the bank / financier before the loan is given against the gold. Here are some important things to know about gold loans and you must also know the interest rate that is charged on gold loans.

Gold loans are one of the quickest and simplest ways to monetize your gold and get money. This loan can be applied by anyone who owns gold either in the form of jewellery or as gold coins or bars. Apart from banks and your local jewellers, there are many NBFCs which also specialize in giving gold loans to retail customers. In fact, many banks are also using NBFC as their last mile link for giving gold loans in rural and semi urban areas.