A gold loan is a secured loan provided by the banks or NBFCs in lieu of gold pledged by the borrower. This is the only form of loan which one can get over the counter in thirty minutes with minimal documentation and the least amount of charges. The amount of gold loan sanctioned is 75% to 80% of the current market value of the gold.
The gold loan when granted has to be repaid as per the agreed terms and conditions of the loan agreement. These terms include the repayment schedule, the tenure of the loan, conditions for foreclosure of the gold loan, and some other related information. It is easy to get a gold loan but borrowers need to be very thorough with the terms and conditions to avoid any form of misperception.
The areas of primary concern for the customers are the tenure and the Equated Monthly Installments (EMI).
The tenure of a loan is the span of time that the customer will take to repay the principal amount of the loan along with the interest and this continues till the entire amount has been settled and the loan has been closed. The tenure of a gold loan depends on the bank which has sanctioned the loan for you. It may vary depending on various factors. Gold loans are usually short-term loans and the tenure can be from 3 months to the maximum of up to 12 months (normal scheme) and 36 months (EMI scheme), it depends on the bank and customers' requirement. For instance, the HDFC gold loan scheme has a tenure of 3 to 24 months. Customers need to be sure whether they can pay back the amount within 12 months or not unless they are opting for an EMI scheme. For some people, a gold loan is the last resort but it has to be a very well-thought-through action else on the occasion of nonpayment/ default the gold pledged with the bank as collateral, will be auctioned off.
The option of repaying the debts with Equated Monthly Installments (EMI) is a blessing in disguise for the borrowers who find it difficult to pay back in one lump-sum amount. An EMI is a fixed amount of payment made by the borrower to the lender on a regular basis. A gold loan amount including the principal and the interest is equally divided over the tenure of the loan to pay off the loan within the stipulated amount of time. The EMI of the gold loan can be calculated online or most of the time it is done by the bank or NBFC for the customer depending on the prevailing interest rate, the amount of the loan, and the tenure of the gold loan.
Gold loan is easy to understand and a very beneficial option in any situation due to the numerous benefits derived by the borrowers under this type of loan.
No comments:
Post a Comment