Different Method of Repaying Your Gold Loan
Gold loans are a practical and expedient option for individuals who require urgent funds, prefer a lower interest rate, or have a lower credit score, ensuring hassle-free access to finance through simple and secure procedures.
The amount of the loan depends on the value of the gold, and the interest rate is usually lower than other types of unsecured loans. The tenure of a loan against gold ranges from a few months to a year, with gold ornaments or coins acting as collateral. However, defaulting on payments can lead to auctioning of the pledged gold, mandating a thorough understanding of the loan agreement and a robust repayment plan.
If you have taken a loan against gold and are wondering about the different methods of repaying it, this blog is for you. In this blog, we will discuss some of the most popular methods of repaying your gold loan.
Different methods of gold loan repayment
Thankfully, there is more than just one way of repaying your loan against gold. Each of them varies from one another and gives different benefits depending on your borrowing situation.
- EMI (Equated Monthly Installments) –
This is the most common repayment method. Under this method, you will have to pay a fixed amount of money every month until the loan is fully repaid. The EMI amount consists of both principal and interest, and it remains the same throughout the loan tenure. You can opt for a shorter or longer tenure, depending on your repayment capacity.
- Bullet Repayment –
In this method, you pay the interest of the loan throughout the tenure, and the principal amount is paid in a lump sum at the end of the tenure. This method is suitable for those who have an irregular income or those who prefer to pay a smaller amount of interest throughout their tenure.
- Overdraft Facility –
Some lenders offer an overdraft facility for the repayment process. Under this facility, you can withdraw money from the loan account as and when required, and you only have to pay interest on the amount withdrawn. This method offers a lot of flexibility, but it is not suitable for everyone as it requires a lot of financial discipline.
- Prepayment –
If you have some extra funds, you can choose to prepay as well. This means that you can pay off a part of the loan or the entire loan amount before the tenure ends. Most lenders do not charge any prepayment penalty, but it’s always better to check with your lender before making any prepayments.
- Automatic Repayment –
Some lenders offer the option of automatic repayment where the EMI amount is automatically deducted from your bank account on a specific date every month. This method ensures that you don’t miss any payments and helps to avoid any late payment fees.
That sums up the repayment process of a gold loan. However, you should choose the one that suits your repayment capacity and financial goals. Before choosing a method, make sure you understand the terms and conditions of the loan and the repayment options offered by your lender.
But, if you’re looking for a gold loan with flexible repayment options, SahibBandhu is the best choice. It offers loans against gold at lower interest rates, with minimal documentation, the instant disbursal and doorstep services. SahibBandhu Gold Loan has a wide network of branches across India, making it accessible to borrowers from different parts of the country. Sahibandhu Gold Loan provides quick and hassle-free access to funds to meet the short-term financial requirements of its customers.
Flexible Gold Loan Repayment with SahiBandhu
SahibBandhu offers a range of flexible repayment options that can help you manage your loan more easily and conveniently. Unlike traditional loans that often come with fixed EMI repayments, SahibBandhu Gold Loans provides borrowers with a choice of repayment plans to suit their individual needs and preferences.
One of the repayment options is SahiMax, in which you are required to repay only the monthly interest and the principal amount at the end of the loan tenure. Another option is SahiDelight, which allows you to make a single repayment of both the principal and interest amount at the end of the loan term.
For those looking for even more flexibility, SahiBandhu offers SahiFlexi, an overdraft facility that allows you to withdraw funds as needed, and only pay interest on the amount used. This can be an ideal option for those with fluctuating incomes or unpredictable expenses.
Overall, SahibBandhu provides a range of repayment options that can help you manage your loan more effectively, while also ensuring that you can meet your financial goals without undue stress or strain.