Gold is no more just a form of jewelry. With the advent of gold loans in the finance sector, there has been a revolution in the lending and borrowing process. Indian households have a substantial amount of gold accumulated. Gold is considered auspicious and has a lot of cultural significance among Indians. Thus, gold can be used as a backup to meet the immediate financial requirements. It is the quickest and easiest way to avail gold loan against the gold articles (gold coins,ornaments etc.) .
Earlier in India, there was the traditional method of borrowing money. The borrower used to hand over the ornaments to the landlords, money lenders and in turn would get loan amounts. This traditional method has now changed into the modern financial method. In this method, many banks and NBFCs lend loan amounts against the submitted collateral. The lenders duly check the quality and quantity of the gold articles and then lend the amount according to their respective gold loan per gram scheme. The borrower can later repay the loan according to the banks or NBFCs instructions.
There are different methods to repay the gold loan. The repayment methods might vary from bank to bank. But commonly there are 4 methods -
Partial payments
Bullet Repayment
Pay only Gold Loan interest rate and principal amount later
Regular EMI
Let's talk about the partial payments in gold loans. In this repayment method,you can partially pay the amount of both interest and principal as and when you desire. You can pay this as per your convenience irrespective of the pre-set EMI schedule. The usual EMI schedule is not at all the concern here. Now, it is a customer-centric approach for the borrower.The advantage with partial repayment is that if you pay the principal amount initially,then the interest payout which is calculated daily on the amount withstanding, gets reduced. Hence going for partial payment of a gold loan is a wider and better option.
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