Gold is not just an ornament; it is a financial investment for many people. When you take a loan from lenders or banks by pledging your gold is known as a gold loan. Gold loans are used to overcome a financial problem or contingency. Gold loans are one of the easiest ways to arrange funds when in need, such as business deals, medical emergencies, travel purposes, study purposes, etc. Gold always comes in for rescue in case of a financial emergency or requirement. It is considered one of the best investment options for individuals.
One of the other reasons people opt for gold loans is the low-interest rates compared to banks’ traditional loans. Gold loans also provide you with an option for flexible repayment schemes.
There are various ways to pay your gold loan, unlike other loans. We have jotted down some of the super easy ways that you can use to repay your gold loans:
One of the common ways to pay the gold loan is through periodic interest. It means that both the principal amount and interest amount will be kept separate from each other. You will be required to pay only the interest amount in equated monthly instalments, and the total principal amount can be paid on maturity. It is a suitable option for people who want to keep their monthly instalments short.
This option is more suitable for people who don't have enough income or monthly cash flow to be able to pay both principal and interest amounts. However, paying only an interest amount increases the interest rate for every month. Before opting for the periodic interest method, borrowers are advised to consult with their lenders about the interest amount, cost, and options for repayment and select accordingly.
Most gold loan borrowers prefer periodic EMIs. Borrowers are required to pay the loan amount from the month following the disbursement month. It is considered a suitable option for salaried people who have a monthly income flow. The monthly EMI includes both the principal amount and interest amount. It is a quick and easy repayment process of gold loans as it deducts from your account monthly.
You can also automate the monthly repayments if you prefer for easy payment. The periodic EMI option also helps reduce the liability of interest as the loan term progresses. The loan foreclosure gets easier after time.
Bullet repayment is a method in which the borrower is required to pay interest and principal amounts at the end of the term of the gold loan. During the loan tenure, you are neither required to pay the interest nor the principal amount. You will pay the entire amount when the loan term is completed. It is known as bullet repayment because you pay the whole amount at once at the end of your loan term.
The interest is calculated for each month, but you will be required to pay the whole amount of interest along with the principal amount when the term ends. It is simple and doesn't put a monthly burden on the borrower.
Another method to repay the gold loan is to make partial payments. You can make partial payments of the principal and interest amounts as per your needs and requirements. Following the EMI system is not important in this type of gold repayment method. You can set up your gold loan payment scheme online as you desire with your lender and make the payments wholly or partially of both the interest and principal amount.
Another option for easy repayment of the gold loan is through an overdraft account. Many banks such as DCB Bank and SBI (State Bank of India) offer overdraft options against the pledged gold to the borrowers. These accounts act as transactional accounts, and people can pay the monthly interest per the account’s borrowing amount.
Life insurance policy assists in paying the gold loan when the option of paying the total amount is loan interest and principal after the term. It gives you an opportunity to pay the principal amount after the term and interest every month, as or when it occurs.
Very few people are aware that even gold loans have the foreclosure method to repay the gold loans. Therefore, customers can pay the entire amount before the due date even though they have opted for any payment method. In turn, preclosure payments reduce the interest on the gold loan. Hence, the customer will end up paying less.
The indiagold app is transparent and reliable and easily downloaded through the play store. It offers a user-friendly and transparent experience to the customers to actively track and manage their payments making the process more convenient and hassle-free. This method will ease your process of repaying your gold loan and help you choose any method you like.
You can pay the interest on the gold loan upfront when it gets disbursed. Then, you repay the principal at the end of the tenure and get your gold back. The lender deducts interest on the gold loan from the loan amount and the rest of the balance amount as a loan. This gold loan repayment option is suitable for those borrowers who may find it difficult to make monthly repayments.
Repaying interest along with principal as per your convenience is an additional flexible option. This scheme provides the flexibility to pay according to financial capability but on the EMI schedule. You can make complete or partial payments of the interest and principal amount based on your cash flow.
Thus, we can say that there are various options that a borrower can opt for the repayment of the gold loan. The repayment has never been this easy. A variety of options allow borrowers to take gold loans immediately without any additional burden. They can repay the interest and principal amount as they like. They can select the tenure of the gold loan as per their requirements.
indiagold offers all these repayment options to the borrowers on gold loans. indiagold provides a quick release guarantee, low-interest rates, no processing fee, minimal documentation, and loan at home service facilities for easy gold loans. For more information on gold loans and their repayment methods, click here.