Wednesday, December 7, 2022

Difficulty in repaying gold loan Payment can be made in these different…

Many types of loans are given by banks, one of them includes gold investment. This comes in handy when you need cash. You can take a loan in lieu of giving gold to banks. Family-owned gold assets are often mortgaged to banks and formal money lending institutions when there is an urgent need for cash.

The gold is kept with the bank until the loan is fully repaid. The gold loan amount and interest rate differ depending on the bank and the tenure with the gold. Once you have taken a gold loan, you have several options to repay the principal and interest. According to HDFC Bank, here are some of the more viable options.

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Payment of interest as EMI and principal
You can get back the EMI paid to you as interest under the repayment of Gold Loan. However, you can pay off the principal with a single payment. This payment can be made at the end of the loan. Borrowers opt for this type of payment as it allows them to pay only interest, leaving only the principal amount, during the repayment tenure of the gold loan.

make partial payment
If you opt for this gold loan repayment method then you are not obliged to follow the EMI plan offered by the lender. You have the option to make partial interest and principal payments whenever you want. If you want to pay off the principal immediately, then you have to pay a very low EMI along with your total interest payment. However, it depends on the tenure of your loan.

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bullet repayment
You have to pay both the interest and the principal amount at the end of the loan tenure under a bullet repayment plan. Will not be responsible for any gold loan repayment during the loan tenure. You do not need to stick to any EMI schedule and can only pay off the loan in full at the end of the tenure. The interest on the loan is calculated every month, but is payable only at the end of the gold loan tenure. This type of gold loan repayment is known as a bullet repayment plan, as you pay the amount in one go.

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Regular EMI Option
A regular EMI-based gold loan repayment plan has been designed for salaried individuals with a fixed monthly income. The total EMI amount outstanding includes both interest and principal repayment. Because the loan is beneficial for the salaried individuals.

after the loan is paid
When you have deposited the balance loan and the interest due at the end of your tenure, the loan account will be closed. If the loan is repaid satisfactorily, the lender will return the pledged gold articles.

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