Gold loan repayment and tenure

The gold loan also referred to as a loan against gold, is a secured loan that a borrower takes from a lender in lieu of gold ornaments such as gold jewelry. The loan amount sanctioned by the bank is a certain percentage of the gold's value. You can repay it through various repayment modes offered by the banks and the tenure is also decided by the comfort of your choice. Unlike other secured loans, there are no restrictions on the end-use of gold loans. So whether you want to plan a trip or pay medical bills, it is a great way to meet your sudden money requirement. Moreover, a lot of private and nationalized banks along with NBFCs offer affordable gold loans interest rates.

Gold loan tenure 

The prepayment periods or gold loan tenure varies from one lending institution to another. It usually ranges from 3-12 months. Depending on a case, some lenders even offer a longer tenure or allow you to renew it in order to extend the tenure. Since the tenure of the gold loan is shorter in comparison with other types of loans, make sure you repay the loan amount on time. Defaulting on gold loans may lead to losing your gold articles and decrement in the CIBIL score too. 

Gold loan repayment

Following are a few options available with the lending institutions to repay the loan:-

• Most lending institutions let you pay only the interest amount each month and the principal amount at the end of the loan tenure. 

• You can choose to pay your gold loan through EMIs ( Equated Monthly Installments ), which will include both the principal and interest components of your loan.

• You can also make partial payments. This option lets you repay the loan without getting bound to a fixed amount of EMI. You can pay the principal amount and interest both.

• One can also opt for bullet repayment schemes where you repay the lump sum amount of principal rate and interest at the end of the loan tenure. Note that the bank calculates the interest on a monthly basis but you pay at the end of the tenure. This option is generally used for short-term loans, typically those for 6 months. 

Also read this: Gold loan to improve your credit score

Applying For Gold Loan Online VS Gold Loan Offline

Gold is no more just a form of jewellery. With the advent of gold loans in the finance sector, there has been a revolution in the lending and borrowing process. Indian households have a substantial amount of gold accumulated. Gold is considered auspicious and has a lot of cultural significance among Indians. Thus, gold can be used as a backup to meet immediate financial requirements. It is the quickest and easiest way to avail gold loan against the gold articles (gold coins, ornaments, etc.). 

Gold loan is a secured and profitable option for consumers possessing gold reserves. These loans are provided by the banks and Non-banking Financial Companies (NBFCs) for letting the consumers meet their immediate financial requirements. Gold loan and its easy-to-apply process make it a potential option to consider during a cash crunch. The process is extremely simple. You can either apply for the loan online from the comfort of your home or you can visit the bank for an availing loan.

Applying For Gold Loan Online

Step 1: Visit the desired bank or NBFCs website. For instance, if you are thinking of applying for a gold loan from HDFC gold loan. Then visit the HDFC bank official website. 

Step 2: Go to the loans tab and click on Gold loan. You will be asked to mention your name, city where you are currently residing,date of birth, mobile number, amount you want to borrow, tenure, etc. view offers. 

Step 3: Verify the mobile number and then view the offers. 

Once all the details are filled in, the bank's representative will contact you to process the gold loan. 

Applying for Gold Loan Offline

Here is the good news, you just need your KYC Documents to avail of the gold loan amount. Visit your bank or lending company with the pledged gold and your KYC documents. Document needed to apply for a gold loan :

Identity proof

1. Aadhar Card

2. PAN Card

3. Valid Driving License

4. Valid Passport

5. Voter ID Card

6. Job Card issued by NREGA

Address proof

1. Aadhar Card

2. Valid Driving License

3. Valid Passport

4. Voter ID Card

5. Job Card issued by NREGA

Also Read:- Gold loan amount that you can borrow

Gold Loan Requirements

A gold loan is one of the simplest and quickest ways to get a loan during the hard times of financial problems. There are various other loans that create a lot of confusion and involve extensive paperwork, verification of documents, and hectic verification processes. Even after all this, there’s a long process of waiting for the approval and after getting it approved waiting for the transaction of money for your loan. On the other hand, a gold loan doesn’t involve any of such hectic processes and you can get your loan in less than an hour.

You can get your gold loan with minimal documentation of papers and as soon as you get the purity and quality of your gold checked and approved by the lender. This kind of loan is best suitable for people who belong to the lower class or middle class and cannot afford the expenses like processing fees. You can solve all your financial problems like school fees, marriage, urgent medical treatments with the help of a gold loan. The gold loan has several other benefits such as a lower gold loan interest rate, no income proof, no processing fees, etc. You can get your gold ornaments back in the same condition after you are done with the process of repayment of the loan to the lender.

In India, anyone who is 18 years old or above and has gold ornaments is eligible to avail of a gold loan. One thing that you should remember while taking a gold loan is the purity of your gold ornaments. The gold ornaments that you pledge with the bank or any other institution should be of 18-22 Karats and bank-minted coins should be of 24 Karats. Higher purity can get you a better gold loan per gram rate.

It is very important for you to note that the gold should be owned by you. The vital documents that are required if you are already an account holder with the bank are maybe just the latest address proof and if you are not a bank account holder then you will be required to submit documents like your passport, license, voters ID card, Adhaar card, address proof, electricity or phone bill, a copy of your signature and 3 passport size photos.

Also read:- 

Gold loan application process post-COVID