As Indians, we love our gold. No matter how crowded it gets, we like to purchase gold during festivals and important days like Akhsaya Tritiya and Dhanteras. But gold is much for than just a piece of jewellery. It is an investment that comes in handy and rescues us from financially troubling times. It is at such times that people trade their gold ornaments to get a loan. A loan that is availed by the pledging of gold ornaments in return for money is known as a gold loan, in which your ornaments serve as collateral. Here are 4 ways in which you can repay loans taken against gold.
Pay the interest as EMI and principal at maturity: One of the easiest ways to repay the loan is to choose an EMI schedule and use it to repay only the interest amount. Keep paying the monthly EMIs and pay the principal amount only on the loan’s maturity date. This is a great arrangement for borrowers as it gives then the time to come up with the principal amount, while reducing the stress on EMIs. As long as you don’t miss your monthly interest payments, your gold remains safe with the lender.
Choose to make payments partially: Another simple way of repaying your loan against gold is to make partial payments on both, the principal amount and the interest whenever you are able to. Such a loan repayment schedule does not require you to confirm to a set EMI schedule. This is a customer centric approach and both, partial and complete payment of principal and interest components is allowed. Also, repaying your principal initially, helps reduce the total interest pay-out that is typically calculated on a daily basis, on the outstanding amount of the loan.
Pay in regular EMIs: If you are a salaried individual, with a regular inflow of cash in your bank account, it makes sense for you to opt for the regular EMI option on loan repayment. The EMI ideally includes both, the principal amount to be paid and the gold loan interest rate. Both banks and other NBFC lenders usually grant and process such a loan in a few minutes, especially to salaried applicants as they can ask you to give post-dated cheques, for the amounts to be deducted from your accounts on a monthly basis.
Opt for the bullet repayment method: Those individuals, who are facing a financial crunch, and cannot opt for either of the above-mentioned loan repayment, can opt to pay the entire amount of the loan i.e. the principal amount and the gold loan interest, at the end of the loan’s term. As such, you needn’t pay any EMIs and can return the total amount when your loan tenure ends. Bullet repayment methods are ideally designed for farmers and businesses which are seasonal in nature.
Pay the interest as EMI and principal at maturity: One of the easiest ways to repay the loan is to choose an EMI schedule and use it to repay only the interest amount. Keep paying the monthly EMIs and pay the principal amount only on the loan’s maturity date. This is a great arrangement for borrowers as it gives then the time to come up with the principal amount, while reducing the stress on EMIs. As long as you don’t miss your monthly interest payments, your gold remains safe with the lender.
Choose to make payments partially: Another simple way of repaying your loan against gold is to make partial payments on both, the principal amount and the interest whenever you are able to. Such a loan repayment schedule does not require you to confirm to a set EMI schedule. This is a customer centric approach and both, partial and complete payment of principal and interest components is allowed. Also, repaying your principal initially, helps reduce the total interest pay-out that is typically calculated on a daily basis, on the outstanding amount of the loan.
Pay in regular EMIs: If you are a salaried individual, with a regular inflow of cash in your bank account, it makes sense for you to opt for the regular EMI option on loan repayment. The EMI ideally includes both, the principal amount to be paid and the gold loan interest rate. Both banks and other NBFC lenders usually grant and process such a loan in a few minutes, especially to salaried applicants as they can ask you to give post-dated cheques, for the amounts to be deducted from your accounts on a monthly basis.
Opt for the bullet repayment method: Those individuals, who are facing a financial crunch, and cannot opt for either of the above-mentioned loan repayment, can opt to pay the entire amount of the loan i.e. the principal amount and the gold loan interest, at the end of the loan’s term. As such, you needn’t pay any EMIs and can return the total amount when your loan tenure ends. Bullet repayment methods are ideally designed for farmers and businesses which are seasonal in nature.
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