Gold is one of the most valuable assets which can be used both for ornamental purposes and as a form of investment. In times of dire emergencies like unexpected health expenses or other financial needs, gold is one commodity that would bail you out. Availing gold loan is the best way to meet the unexpected financial requirements. A gold loan is a loan which can be borrowed from banks, NBFCs or private vendors in exchange for your gold. The lender will keep the gold until you pay back the entire amount. However, before you apply for a gold loan, you need to understand that there are different methods of repayment.
A gold loan has a number of advantages and one of these is that the repayment is quite flexible. Unlike the personal loans, where it is mandatory to pay the EMIs on time, gold loans do not follow a rigid EMI payment schedule. Here, partial payments of the principal amounts as well as the interest can be made by an individual. This payment method is quite advantageous as the individual can significantly reduce his total interest payout by paying back the principal in the beginning.
The regular EMI option is a very convenient and popular repayment method, especially among the salaried class. This type of repayment method is aimed at those people who receive a fixed amount in their bank accounts every month either through pay checks or some other form of investment. The EMI option comprises both the principal amount as well as the interest. The regular EMI option is convenient and can be availed quickly.
Interest paid as EMI and the principal amount later
Most of the people who apply for a gold loan opt for this kind of arrangement. Whatever interest is to be levied on the gold loan, the borrower can pay through easy installments. Meanwhile, the principal amount can be paid back to the lender at the time of the maturity date of the loan. However, the principal amount is to be paid back in full as part payments are not allowed. The best part of this kind of arrangement is that the borrower need not burden himself by paying hefty EMIs. This is because the principal amount can be returned at the end of the loan tenure and does not form a part of the EMIs.
Bullet payment is another very good gold loan scheme. Here there are no EMIs and partial payment options. All you need to do is repay the entire amount, which includes the principal amount and the interest, when the term of the home loan expires. Thus, it saves you the hassles of making some payment on a regular basis. But, do keep in mind that the interest is calculated on a monthly basis which has to be paid back at the end of the term of the loan, which can make it a huge amount. So, opt for this method of payment only if you are confident that you would be in a position to repay the entire amount towards the end.
Check out these four repayment methods and opt for the one which suits your convenience. There are a number of banks, financial institutes, and private players who provide gold loans at attractive interest rates. It is advised that you go with reputed gold loan companies like UNIMONI which is counted among the best gold loan company in India.