A gold loan is one of the most popular loan products that is availed by the borrower, mostly in the times of urgent requirement of funds. While a loan on gold can be availed against the mortgage of a gold asset, it does not require you to submit any proof of income or CIBIL score. Among all the benefits that a gold loan offers, one of the most crucial advantages of availing a gold loan is that it provides flexible repayment methods to repay the loan. Also, we can get a gold loan at a low gold loan interest rate which makes it a feasible option. “Taking a gold loan is a difficult, complicated and long process. And the process of repayment is stressful. Also Loan lends 75% at LTV whereas You can avail Cash for Gold which is an instant stress free process & would be 99% around the actual value.”
These are some of the common ways through which you can we can repay the gold loan:
- Bullet Repayment: One of the most popular repayment options offered by both banks and NBFCs is bullet repayment. Under this method, the gold loan borrower does not need to pay the principal amount of loan as monthly instalments and thus, the entire principal amount is repaid at the end of the tenure.
Key benefits & features of this method are as follows:
- Gold loan borrowers can choose this method in case of a gold loan of shorter tenures upto 6 months. It is because they can utilise the entire amount and thus don’t have to bear the burden of paying hefty EMIs.
- Using this method, the interest is calculated on a monthly basis. Borrowers can either choose with an option to pay interest only EMIs every month or else the entire loan amount is paid at the end of tenure.
- If a borrower chose this method of repayment, they may be allowed a lower LTV of 65% as against the maximum LTV of 90%.
- Regular EMI Scheme: Similar to any other loan product, the borrower can repay the gold loan using the EMI scheme. Under this method, the borrowers need to pay regular EMI according to the gold loan interest rates.
Key benefits & features of this method are as follows:
- This method of repayment is mostly suitable for gold loans of longer tenure and greater loan amounts.
- Using this method, borrowers need to pay both the principal amount and interest every month and is suitable for mostly salaried individuals who have a regular flow of cash in their bank accounts.
- Gold loan borrowers can get gold loans with attractive LTVs of upto 90%.
- Overdraft Scheme: The special gold loan scheme of repayment allows the borrowers to repay the gold loan as and when they want according to their needs. Under this method, they can avail gold loan based on the predetermined credit limit.
Key benefits & features of this method are as follows:
- This scheme is specially designed for businessmen and self- employed who have fluctuating requirements for funds.
- Under this method, the interest on the gold loan is charged on the utilized portion at any given point of time.
- Borrowers can renew the loan tenure at the end of loan tenure by paying the processing fees.
Conclusion: Along with the above- mentioned methods of gold loan repayment, borrowers can also choose to prepay the gold loan before the end of loan tenure by paying specific prepayment charges on the gold loan. However, most of the lending institutions do not charge any prepayment penalty.
