We recently discussed how the gold loan works and the growing demand for such loans among lenders. As gold loans are easier to process and deliver, banks, and non-bank financial institutions (NBFCs) have come up with variations by changing the way loans are repaid.
Paying interest only once a month
This option includes repaying interest on an average monthly interest rate (EMI) for a gold loan. The principal amount needs to be paid in full at maturity. The borrower is liable to pay interest only during the loan period. On the flip side, lower payments can lead to higher interest rates on the borrower.
EMIs every month
This is a standard loan repayment that focuses on the monthly repayment category. Payment of interest and interest will commence from the following monthly payment month. For example, you will pay a full interest rate of Rs 59,910 during a gold loan, taking into account the above assumptions.
In the case of interest payments, the bank charges interest every month, but will only be paid once and for all at the end of the loan period. Eligible for short-term gold loans for six months to one year.
How does this work: Suppose you take out a Rs 5 lakh gold loan for a one-year stay of 9 percent per annum on a coin payment plan. During the loan period, you will not pay interest and principal to the lender. Therefore, at the end of the loan, you will have to pay Rs 5.45 lakh, which includes Rs 45,000 as interest and a maximum amount of Rs 5 lakh.
Making Partial payments
With this payment option, you can pay partially to your gold loan lender whenever you have enough money. Any proceeds from the sale of the dud investment or an annual bonus from the employer may be used for this purpose. Lenders allow you to pay partial or full payment on both interest and principal components, regardless of the pre-set EMI schedule.
The monthly interest on overdraft accounts
Banks such as the DCB Bank offer an overdraft facility against Development Credit Bank Gold Loan. These over-the-counter accounts have commercial centers and monthly interest will be charged on the loan amount.
In today’s time where so many lenders have come up with their exciting deals with the offering of Gold Loans, it has become difficult for the borrowers to decide and select one single lender that suits their needs and situations the best.
We at Dialabank with a team of experts in the financial advisory are here to guide you through the various financial products available in the market.
Call us today to get your queries resolved- 9878981144