Everything You Need to Know about Gold Loan Tenure

Gold loans have become increasingly popular due to their accessibility and quick processing times. These loans allow individuals to leverage their gold assets for immediate financial needs. One crucial aspect of a gold loan is its tenure, which dictates the repayment period. 

The tenure of a gold loan is crucial as it affects your repayment schedule and interest costs. Having the option for flexible repayment options allows you to plan your loan journey smartly. Considering the need, SahiBandhu gold loan offers three different gold loan schemes that allow you to customize your repayments. 

First Let’s understand gold loan tenure and how it affects your gold loans.

What is a Gold Loan Tenure?

Gold loan tenure refers to the period during which borrowers can utilize the gold loan amount before repayment is required. It is a crucial aspect of gold loans as it determines the duration of the financial commitment and the repayment schedule. 

The maximum tenure on a gold loan is usually 24 months for long-term loans repaid in EMIs, and six months for short-term loans repaid in lump sums. Institutions and NBFCs offer various repayment options for gold loans. These may include equal monthly installments (EMIs), bullet payments (repaying the principal at the end of the tenure), or flexible repayment schemes tailored to the borrower’s income sources.

For example, if you opt for a gold loan tenure of 12 months, you have one year to repay the loan. Let’s consider a scenario where you borrow ₹1,00,000 with a tenure of 12 months at an annual interest rate of 10%. This implies a monthly installment of approximately ₹8,333 (EMI). At the end of the 12-month tenure, you would have repaid a total of ₹1,10,000, which includes the loan amount and the interest accrued over the year. This tenure structure allows borrowers to plan their financial commitments and manage their cash flows efficiently.

Short Term vs Long Term Gold Loan Tenure

Short-term gold loan tenures are suitable for addressing urgent financial requirements, such as medical emergencies, education expenses, or agriculture needs. This can help you to get lower interest rates on your gold loan and make your repayment easier.

On the other hand, long-term gold loan tenures are beneficial for larger financial endeavors like business expansions or home renovations. While they offer lower monthly payments, borrowers may end up paying more interest over the extended loan duration.

Can I Extend the Gold Loan Tenure?

Yes, some gold loan providers like SahiBandhu provides facility to refinance or balace transfer schemes to extent loan tenure. For instance, if there’s a temporary financial setback or unexpected expenses, extending the tenure can ease your monthly repayment burden. 

Alternatively, you can explore other options to extend your gold loan tenure. SahiBandhu offers flexible options like Balance Transfer (BT) and refinances to facilitate tenure extension. 

• Balance Transfer (BT): This feature allows borrowers to shift their existing gold loan to SahiBandhu from another lender. Beyond extending your loan tenure, this can help you to get lower interest rates and better repayment plans. It helps reduce financing costs and improve overall loan management.
• Refinance: Refinancing involves renewing your existing gold loan. Sometimes, at the loan closure, you are not able to make complete repayment, in that case, you can use the refinancing option to renew your loan. Borrowers may opt for refinance to secure better terms, extend the tenure, or adjust the repayment structure based on their current financial situation.

If you are looking for a loan with a longer tenure, you may explore property loans. However, property loans have more specific documentation, terms & conditions. It’s advisable to check gold loans vs property loans to know which is better for you.

Tips to Choose the Suitable Gold Loan Tenure

Choosing the right gold loan tenure is essential for effective financial planning. Here are some tips to help you decide:

1. Assess Your Financial Needs: Consider the purpose of taking the gold loan. A shorter tenure may be suitable if you need funds for short-term expenses like medical emergencies or agriculture needs. A longer tenure may be suitable for long-term investments or business expansions.
2. Evaluate Repayment Capacity: Assess your monthly income and expenses to determine your repayment capacity. Choose a tenure that allows you to comfortably repay the loan without straining your finances.
3. Interest Rate Consideration: Understand the interest rates lenders offer for different tenures. To make an informed decision, compare the total interest payable over the loan period for various tenure options.
4. Flexibility Needs: Consider your loan repayment flexibility requirements. Some borrowers prefer fixed monthly installments (EMIs), while others may opt for bullet payments or flexible repayment schemes based on their income sources.

SahiBandhu Gold Loan Scheme For Easy Repayment

SahiBandhu offers a range of gold loan plans tailored to meet diverse borrower needs:

1. SahiMax (Monthly Interest): This scheme allows you to pay only the monthly interest and the principal amount at loan closure, providing flexibility in managing your cash flows.
2. SahiDelight (Single Repayment): With this scheme, you can pay the interest and the principal amount in a single repayment at loan closure. It simplifies the repayment process and offers convenience.
3. SahiFlexi (Overdraft on Gold): SahiFlexi provides an overdraft facility on your gold assets, allowing you to withdraw funds as per your usage. You pay monthly interest based on the amount utilized, offering flexibility and cost-effectiveness.

These schemes offered by SahiBandhu cater to different borrower preferences and financial goals. Choose the one that aligns with your repayment capabilities and financial objectives for a smooth borrowing experience.

Bottom Line

Understanding gold loan tenure is crucial for making informed financial decisions. SahiBandhu’s flexible repayment options and borrower-friendly features make it a preferred choice for individuals seeking gold loans. Whether you need short-term liquidity or long-term financial support, SahiBandhu gold loans offer tailored solutions to meet your needs while ensuring a smooth borrowing experience.