Gold Loan Repayment Methods

Why opt for a Gold loan ? 

When you get a loan by providing gold as collateral, you will get instant cash to pay for immediate expenses, such as short vacations, emergency medical care, buying a bicycle or car, etc.

The following is a list of some of the main advantages of gold loans obtained from banks and other financial institutions -

Fast processing and payment : 

After the individual sends the gold to the financial institution, the loan amount will be paid to the borrower in an agreed manner. Gold is held as collateral in credit institutions. Until the entire loan is repaid. The lender appoints experts to determine the value of gold on-site so that the processing and withdrawal process is fast and time-saving.

Compared with unsecured loans, gold loans are low. Since the bank retains the borrower’s gold as collateral, there is no need to worry about refunding that amount in the event of loan default. Some banks offer gold loan interest rates up to 10.5%, while loans provided to individuals have higher gold loan interest rate.

Gold stays safe : 

When it appears as collateral, banks and other financial institutions offer three levels of protection for gold coins and jewellery. They will be safely stored in the bank vault and returned during the entire mortgage period. Once you have paid off the loan, the security infrastructure and advanced video surveillance in the bank vault will use the security provided by the safe deposit box instead of the home safe.

Purpose : 

The bank does not restrict how borrowers want to use the borrowed funds. Individuals can use it for investment purposes or pay for emergency medical care, education, business, marriage, etc., related expenses. You can also use the borrowed amount. Among other things, as long as the purpose is not illegal, the necessary purchases, redesign and renovation of the home can be funded.

Document Verification : 

It is based on the applicant's knowledge of CIBIL scores, annual income, etc. This data is necessary because it will help lenders understand the risks they face in providing unsecured loans (personal loans) to applicants. A person needs to offer some primary documents, such as proof of identity and proof of address. Since the risk borne by the lender is small (because it is a secured loan), the requirements related to the loan are small and simple.

Help meet short-term financial needs/goals : 

The loan period starts from 6 months and can be extended to 2 years, allowing the borrower to complete the loan earlier than most other loans. Those who want to meet their short-term financial needs and goals.

Simple selection criteria : 

Anyone over the age of 18 can apply for a gold loan. For certain other types of loans, the lender requires the applicant to be at least 21 years old. Approval of a gold loan application does not depend on the CIBIL score or repayment history but on the value of the gold jewellery that the person is trying to mortgage. There are no restrictions on the applicant's occupation-housewives, clerks, entrepreneurs, etc. can apply for golden loans as long as they have good solvency.

Flexible repayment methods : 

Although the repayment structure depends on the lender, some lenders allow the borrower to repay the principal at the end of the term. According to this repayment method, the person must repay the interest amount within the validity period of the loan and repay the principal when the loan is due.

Special gold loan programs : 

The government has launched some special gold loan programs for low- and middle-income groups, women, farmers, etc. To request information, you can contact the financial institution from which the loan was obtained. A person may be eligible for any specific gold loan program. Gold-backed loans are usually issued at a discount rate.

Andhra Bank gold loan has three Repayment Options. Bullet repayment scheme, Overdraft scheme, and Equated Monthly Installments.

• Bullet Repayment Scheme - The principal amount is due at the end of tenure, while interest is charged every month.
  
  
• Overdraft Scheme - The interest is only charged on the amount disbursed by the borrower.
  
  
• Equated Monthly Installments - An indicated amount is charged towards month-end upto the end of the tenure period.