A gold loan is a type of secured personal loan where you pledge your gold items to the bank, NBFC, or any other lender in exchange for money. It is a type of loan where you transfer the possession of your gold to a bank or a lender in exchange for money for a specified period of time. The loan amount that you get in exchange for your items is usually 70-75% of the gold’s value which means the bank holds on to a certain amount just in case you are unable to pay the loan back. Gold loans are usually short-term loans where the loan is repaid within 3 months to a year.
How can you repay the loan?
You can repay the loan in EMIs or you can also pay the full amount with gold loan interest at once. You also have the option of paying the interest amount upfront and then repay the loan amount at the end of the loan tenure. The loan period is usually 3-12 months.
The period of repayment cannot exceed two and a half years which means that the loan has to be paid within 30 months. Some lenders give an extra 6 months grace period and let you repay the loan in 36 months.
You can renew your gold loan on request and that will extend your period of repayment. Your lender may ask you to pay renewal charges based on the loan amount and stamp duty as per the law.
Since a gold loan is a short-term loan, one should
Gold has been a convenient way to avail loans from very ancient days. It is still the most secure way of getting the loans within a short span of time. There are many lending institutions in the market. SBI gold loan schemes are some of the most popular options to get hassle-free loans at lower gold loan interest rates.
Also Read:- Things to do with the gold loan
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