The new guidelines permitted lenders to lend up to 90% of the gold's value, rather than the previous limit of 75%. During the pandemic, lenders' gold loan books swelled. If you already have a gold loan per gram, you can repay your loan and get your gold back using any of the methods mentioned below, as long as your lender allows it.
Unlike most other loans, you do not have to pay back the Gold Loan Per Gram in monthly EMIs; instead, you can choose from various repayment options to fit your budget.
Pay the interest in EMIs and the principal until the loan is paid off:
According to the lender’s EMI schedule, this alternative allows a borrower to pay only the loan’s interest portion in monthly installments. When the loan term expires, the principal balance is paid in one lump sum.
Make versatile partial payments of the principal and interest portion:
You may also choose to make partial installments of the principal and interest on the loan. You are not expected to adhere to a set monthly installment schedule by using this form of payment. This is because interest is usually calculated every day. However, paying your principal first will save you a lot of money on good interest, "According to the Indian Bank Gold Loan.
The most simple bullet repayment plan
The bullet repayment scheme is used in conjunction with the gold loan online payment option. You can repay the entire loan amount, including the principal and interest, in a single lump sum at the end of the loan term using this form. As a result, there is no need to make monthly payments. Simply repay your loan and receive your gold from the bank all at once. Note that the bullet repayment scheme is usually only applicable to short-term loans, such as those repaid in six to twelve months.
EMIs are made up of the principal sum as well as the interest rate:
You may pay a portion of the principal and the gold loan interest part in equated monthly installments using this form. This repayment plan is usually designed for salaried borrowers or those who receive a monthly payment into their bank accounts.
The following are some of the benefits of a gold loan:
I. Production time is reduced
The main advantage of this type of personal loan is that it is processed as quickly as possible. Since gold loans are backed by real gold, bankers are also willing to lend money quickly. Banks and financial institutions are still protected because they can sell physical gold in the event of a default. This is one of the reasons why banks issue such loans in a matter of hours.
II. The less complicated repayment process
Another advantage of a gold loan is the ease with which it is repaid. It's a one-of-a-kind feature that allows the borrower to pay off the interest first and only pay off the balance later or at the end of the loan. Many people are drawn to gold loans because of this specific feature.
III. Lower interest rates
The interest rate factor is the next advantage of a gold loan per gram. Since they are secured loans, this form of personal loan has lower interest rates. On average, personal loans have interest rates that range from 15% to 18%. On the other hand, a gold loan has interest rates that start at around 13%, making it more available to the average Indian. Just the gold in the article is worth something in terms of loans. Banks may also request documents such as pay stubs, tax returns, and Form 16 to verify the borrower's repayment eligibility.