Gold loans are without a doubt the complete saviour of people in need of funds as they don’t have any such rigid rules as to why should the gold loan be taken and for what purpose should it be used. So, it is pretty apparent that a gold loan will be preferred by most people thinking of going for a loan.
As we all know that gold loans have gained a lot of popularity recently due to all the perks that it carries with it such as flexible tenure, convenient rate of interest, no processing fees etc. Now, whether it is a gold loan or any other loan, all of them involve specific repayment systems which involve paying certain monthly instalments along with the principal amount. And every person thinks of it to be better when it comes to repaying the loan amount before the time due because no one appreciates debt, whether minor or significant, on their plate. So people usually plan on repaying the loan amount as soon as they receive any lump sum amount or save up some money.
But is it beneficial to pre-pay or repay the loan amount?
Prepayment is more beneficial for the repayment purpose of loans. Still, the prepayment option does not come with simple steps to repay the amount any day you feel convenient. There are specific rules and conditions which many banks and lenders ask for while the repayment process is done.
Though prepayment is a better option, it would lead to you wavering off all the debt off your shoulders, but some banks might even charge a certain amount if you decide to prepay the loan amount. Most of the banks don’t charge any amount, but some might ask for the pre-payment amount, so in that case, you need to carefully check whether the bank you have applied for a loan with asks you to pay some charges for prepayment or not.
Apart from these factors, there are undoubtedly other factors that need to be taken care of while applying for a gold loan. For example, various banks offer online gold loans nowadays, which makes it easier for you to apply for a loan with just a click of a few buttons, and they also provide you with a Gold loan Calculator which you can use to calculate the monthly instalments which you need to pay to the bank against your loan amount.
There are various other factors to be considered, such as tenure, ranging from 3 months to 3 years. This can also be seen as a deciding factor in the repayment consideration as the tenure is a deciding factor as to how you will be repaying your loan amount. Next is the processing fees of the loan, the processing fees vary according to the different banks, and it changes according to the banks that we opt for taking the loan from. Some might not charge any processing fees, whereas some might charge a particular processing fee up to a certain percentage, or others might charge a fixed percentage of the whole amount of the gold loan.
Hence, one should enquire about this too as all these will affect the whole loan amount that you will have to repay along with the monthly instalments. Many banks offer this type of loan and various repayment schemes, and some very renowned informal lender organizations do the same. IIFL Gold Loans relatively easy when it comes to availing gold loans as they provide gold loans within a few minutes of applying for the loan as they don’t require many documents.
A few of them are- identity proof, showing Aadhar card, PAN card, Voter ID card etc., residency proof, telephone bills, electricity bills, water bills, income proof, bank statements, salary slips etc. in addition to this, they also ask for the tenure period as well as the rate of interest. Moreover, gold loans generally don’t require any credit score to be shown which makes it more convenient to apply for a loan even if you have a bad credit score.
Also read this: Gold Loan Better Than Another Loan