Gold is a valuable asset in India. It has deep cultural significance in our society. When you have gold, it can help you financially during difficult times. Almost all banks and NBFCs offer gold loans and facilities attached to them.
In this blog, we will talk about some of the popular gold loan repayment options, which one would be your choice, preparing for a gold loan, and making the most of it. If you can check an app for DSA, it will help you find some unique aspects of different loans and choose the right one for that.
Some of the Key Features of Gold Loans
A gold loan is a kind of secured loan that you can have after saving your gold as collateral. The gold can be of any form or shape. Once you repay the loan amount on time, you will get back your gold without any issues. Some of the unique features of gold loans are-
- If you compare the processing of a normal loan with a gold loan, you will find that this particular loan is faster than any other loan in the market. You can get money real quick.
- As part of a secured loan, the importance of credit score is low here.
- You can decide on the tenure of the loan as per your choice.
- The rate of interest is also nominal for gold loans.
These are some prominent reasons behind getting a gold loan in India. You can go to any bank of your choice or a loan company to get the gold loan money.
Different Types of Gold Loan Repayment Ways
There are a number of popular repayment facilities for gold loans. Have a look at a few of them before choosing the particular one you prefer-
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Interest Upfront Repayment
In this method, you should target paying the interest at the start of your repayment. After that, you will get time to repay the principal amount. In this way, we can reduce the total interest on the gold loan.
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What About Partial Repayment?
Partial repayment is also quite popular. Here, you have to pay a fraction of your loan money at a certain time. Once the tenure ends, try to settle your pending debt.
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Over Drafting
A few gold loans come with an overdraft facility. It means you have the power to withdraw any amount of your choice, and all you have to do is pay interest on your used amount. People who run businesses and are looking for uninterrupted cash flow need this over-draft facility.
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EMI Payment
Repayment using EMI is the easiest option you can have. Most people choose this method to settle their loan money. People with a steady income would like to use this particular method for their convenience.
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Bullet Repayment
Bullet repayment is the final option you can have. Here, you will repay the interest first, and the principal will be settled later using a lump sum amount in the end. This is viable for those who are expecting to have a large amount in the near future. Talk to a DSA partner who can help you with a variety of loans available in the market.
How to Prepare for A Gold Loan?
You can’t randomly choose just any random gold loan. Here are a few aspects you must check before getting a gold loan in India-
- Unless the lender is viable, your gold is not safe there. Make sure to check the credibility of the bank or lending company and then only look for options.
- The tenure of the loan is going to be a vital aspect. Choosing the tenure should align with your financial condition.
- Have you checked the gold that you will keep to have the money? Ensure the standard and purity of your gold before going to the bank and attach it as collateral.
- The rate of interest is the most vital thing we need to check before having a gold loan. Compare the interest rates offered by different banks and loan companies to get the best deal.
- Finally, the loan-to-value ratio must be near about 75%. Always choose greater LTV for your gold loan.
Making the Most of Gold Loans
- File all the documents carefully.
- Check your ability to repay.
- Talk to an expert who can help.
Following these key aspects will ensure choosing the right gold loan in India and have diverse benefits. Do not make any decisions in a hurry, and do your research properly to get the best results. Also, please feel free to share your thoughts below in the comment section about the content.
