Gold loans are essential for people. A lot of individuals rely on outside financial help to get by their rough financial spots. This is mainly because the gold loan interest rate is extremely affordable and is justifiable by all. For someone who needs to take out a fast loan with a low-interest rate will find gold loans extremely ideal.
In the case of gold loans, a few things are needed to be kept in mind. Firstly, gold loans have lower interest rates than their fellow loans which enable people to be financially able to afford the loan. A gold loan is secured by the collateral the borrower is supposed to furnish before the bank or financial institution so that they have some security that is backing the loan. This makes the need for a credit report or CIBIL scores unnecessary and thus, in the case of a gold loan the applicant with a bad credit history can also apply for a gold loan with ease.
An easy gold loan is not just a saying, gold loans are actually really easy to access. Banks like the Canara Bank gold loan actually provide gold loans within a few hours at maximum. Generally, it takes around an hour to take up a gold loan and for it to get processed. Very much like a personal loan, gold loans do not restrict one on how to use their loan amount. One can use it to pay off debts, invest in their businesses, or even pay off their bills. This also makes them very popular because they are versatile and still on a budget.
Talking about the various processes involved in taking out a gold loan, the repayment has to be one of the most important decisions. One should keep in mind their income and cash flow before deciding upon a repayment option for their loan. One should never take this decision without research or without exploring all their different available options.
There are a few different repayment options which we shall explore here.
Monthly servicing of interest: Under this repayment option, the bank will let the borrower pay back only the monthly interest every month as per the EMI schedule and to pay off the principal amount when the loan is finally matured. The borrower will only have to pay the interest during the tenure of the loan. This repayment choice is ideal for borrowers lacking satisfactory income or pay to support both interest and head parts at the same time. However, it should be kept in mind under this repayment method that there should be no arrears in the repayment. If by any chance there are arrears, the lender can charge a higher sum of interest in some cases.
Bullet repayment: Bullet repayment option is one of the extremely common offered repayment choices by various gold loan lenders. It permits the loan owner to repay both the principal amount and also the interest in one single amount towards the finish of the credit residency. Loan specialists generally demand interest consistently. While gold credit residencies range between a quarter of a year to three years, those offered with shot reimbursement alternative accompany residency of as long as one year. This choice is ideal for individuals who are not certain of their reimbursement limit during the advance residency. As both the interest and principal are reimbursed toward the finish of the loan period, the interest cost caused by selecting this choice would be the most noteworthy.
Regular Monthly EMIs: As the name suggests, this is the regular option that is available for all and at all banks and financial institutions. Under this repayment method, the bank gives you the option to pay the EMI the usual way- both the interest and the principal amount being repaid under equally distributed installments. Anyone with a steady income flow and a sustainable salary or income can take to this method as a repayment option.
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