India's 1st long-term gold loan is here - Check interest rate, tenure and other important details

With an aim to provide liquidity to individuals and small businesses and help them tide over the Covid-19 economic crisis, non-banking finance company (NBFC), Indel Money, has launched the first long-term gold loan in the country with two-year tenure.

Indel Money’s two-year gold loan carries an interest rate in the range of 12-24%.

Indel Money had launched for the first time in the country a long-term gold loan with one-year tenure in 2019. "Encouraged by overwhelming response to the one-year loan, the company has now introduced this new two-year loan especially in view of the current credit crunch due to the pandemic," the NBFC said.

Commenting on the launch, Umesh Mohanan, Executive Director and CEO, Indel Money, said, “Traditionally, gold loan has always remained a short-term or bridge loan. Customers end up paying higher interests by repledging the gold after the short periods of 90 days or 120 days. Our long-term gold loan saves them from this hidden trap. You don’t need to re-pledge or jump the interest slabs here."

“This product ends the age-old practice of auctions and makes sure that customers enjoy the ownership rights with a transparent interest structure and high customer support,” Mohanan added.

The gold loan helps customers retain their ownership of the gold pawned and dispenses with the tradition of auctioning the pledged gold if loan repayment obligations are not honoured by the customers within the stipulated tenure.

The company’s AUM in FY 2018-19 was Rs 229.3 crores. As on July 2020, The AUM stands at Rs. 450 crores. The company aims to take the AUM to over Rs 1000 crores in FY 2020-21 and increase the branch network to 425 by FY2022-23 by strengthening presence in Kerala, Karnataka, Tamil Nadu and expanding operations to Maharashtra, Gujarat, Telangana, Andhra Pradesh, other parts of India. The gold loan disbursement of the company in FY2019-20 was Rs. 959 crores as compared to Rs. 538 crores in FY 2018-19