How To Get A Jewelry Loan In India In 2022? - Get Jewellery Loan | Worldwide Jewelry Loan Solutions


Friday, January 21, 2022

How To Get A Jewelry Loan In India In 2022?

Get Jewellery a Loan in India in 2022

The Indian jewelry industry has always been a safe bet. Historically, the sector has enjoyed easy credit and rules requiring banks to allocate a certain proportion of their funds towards export activities. But times have changed, and the outlook for the jewelry industry is bleak. With the pandemic in full swing, it's no wonder that banks are tightening their screws on the industry.

As gold prices decline, more banks are tapping into the $1.5 trillion gold hoards of Indian consumers. While the formal banking sector continues to focus on niche customers, the gold and diamond jewelry loan industry may become more organized and attract a more significant number of bankers. However, it's still a small industry, with only a few notable players. MCFL, for example, has a more traditional business model.

MCFL is one of the largest non-banking financial companies in the country. It has been providing loans to MSME and SME businesses since 2012 and is backed by a senior jewelry industry veteran, Meghraj Jain. 

The company will leverage the promoter's decades of experience in the fine jewelry business to offer loan services to jewelers. And its zero-debt status and extensive network of retail outlets are also significant factors.

It's easier than ever to obtain a loan for jewelers. Unlike a payday loan, this type of lending is more transparent and doesn't require a credit check. Instead, you can sell your jewelry outright or pay the lender to purchase it. And the interest rates for these loans are a lot cheaper than the fees you'll bear with a payday loan.

Jewelry Loan In India || Get Jewellery Loan
Jewelry Loan In India || Get Jewellery Loan

Many banks have decided to exit the diamond business. However, it's essential to understand that it isn't a good idea to borrow money from a bank with a negative reputation. And the banks that did pull back were viewed as safe bets. In reality, a good investment in gold and diamond jewelry will profit the lender.

While the Reserve Bank of India limits the loan-to-value ratio to seventy-five percent, it's a safe bet that this figure will keep rising in the coming years. In addition to the lower interest rates, there are no other restrictions on the amount of gold you can borrow. 

Aside from the current interest rates, you can also apply for a mortgage or home equity loan to finance your jewelry purchase.

The country's gold market is the largest in the world. India is the most extensive gold stock in the world. Historically, people have used gold to finance their purchases. Even today, people often take loans against their precious jewelry as collateral. But in India, people rarely sell their gold ornaments to finance their needs. In the last few years, the country has seen a dramatic increase in the use of gold.

In addition to the rise in demand for gold, the price of gold is still high. Buying gold is a safe investment, and people across all economic strata buy gold on auspicious occasions. In India, buying and selling gold is common, especially on auspicious occasions, and is excellent for building a portfolio. It's a popular choice for many, as it has long been regarded as an essential part of the Indian economy.

Although gold is still a safe bet, banks are not ready to lend it. For this reason, there's a solid informal sector in rural India, and, likely, the industry organized will never completely capture the entire gold lending market in the country. Nonetheless, many businesses expect a recovery in sales and revenue over the next few years to focus on financing.

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