Gold Loan Repayment Procedure - Things You Need to Know

Aug 12, 2020

India’s affair with gold and its vanity is known for ages and continues to date. According to a Business Line report, consumer demand for gold in the country was around 760 metric tons in 2018, second only to China’s demand of 994 metric tons. Nevertheless, in most cases, this precious metal ends up in Indian lockers or safes, with minimal use of the asset.

However, with the introduction of the gold loan facility by some reputed fin-tech platforms, consumers are slowly starting to appreciate that they can monetise their gold ornaments without outright selling them. Hassle-free and affordable gold loans are becoming the go-to option for many during financial urgent funding needs.

Still, repaying such loans can be a concern for borrowers. With innovative repayment solutions, however, reducing this liability is more convenient than ever. Before proceeding to learn more about the various gold loan repayment procedures, here is a brief idea about gold loans in general.

What is a Gold Loan?

A gold loan is a secured lending option gold owners can utilise to secure financing against the pledge of this precious Jewel or ornaments. The financial assistance so received is based on the weight and current market value of their gold items.

In most cases, a gold loan borrower needs to pledge gold ornaments of a certain quality or standard. Rupeek Fintech Private Limited, a well-known gold loan provider, allows its consumers to pledge gold jewellery that is classified between 18 carats and 22 carats in terms of purity.

Gold loan repayment period tends to vary from one financial institution to the next. Nonetheless, these short-term loans usually range up to 1 year in most cases, allowing borrowers to release their asset within a short duration on repayment of the total liability. Minimum repayment term may even be three to six months in some instances.

Different Types of Gold Loan Repayment Procedures

Unlike most loans, gold loan consumers can receive greater flexibility when it comes to repaying their outstanding dues. Before you avail such credit, ensure you go through the various repayment options carefully.

  • Interest payment

Under this option, a borrower can opt to clear only the interest applicable toward this loan, as per the EMI schedule decided by his/her lending institution. For instance, you decide to borrow Rs. 1 Lakh as a gold loan, which accrues a monthly interest of Rs. 3,000 for 4 months.

If you opt for an interest payment option, you would only need to pay Rs. 3,000 as EMI for this advance. At the end of your gold loan repayment period, you would need to clear the entire principal amount (Rs. 1 Lakh) at once.

Such a procedure can significantly reduce the financial strain on the borrower by limiting liability during the repayment tenure. You must, however, be ready to either repay the principal as a lump sum amount at the end of this period or renew it.

  • Bullet repayment

Another specialised form of repayment, bullet repayment option allows a borrower to defer both the principal and the interest amounts on the gold loan up to the tenure’s end.

For instance, if your loan tenure is six months, with bullet repayment gold loan, you do not need to service your loan until the tenure runs out. At the end of this period, you would need to clear the principal and accrued interest, at once.

Bullet repayment option serves helpful for borrowers who lack immediate financial support to start loan repayments from the get-go. The loan term thus buys you time to arrange for the necessary funds and pay at the tenure’s end to release the pledged gold.

Interest here is calculated monthly for such repayments, even though a borrower does not repay in instalments.

  • Part prepayment and foreclosure options

Besides the interest and bullet repayment gold loans, one can also go for facilities such as part prepayment and foreclosure. The former refers to paying a part of the principal and interest portion of a loan before its due date. If you decide to close the loan account by paying the total outstanding balance before the tenure runs out, it is known as foreclosure of a loan.

Reasons that Make Gold Loans Popular

Rupeek can be a suitable lender for gold loans as it provides several beneficial features to simplify repayment of the advance. These aspects ensure ease when clearing dues and releasing the pledged jewellery.

You can look forward to the following facilities when making repayment of your gold loan –

  • Digital modes of repayment

Gold loan consumers can repay their loan from the comfort of their homes via the dedicated app. An internet connected device like a smartphone, tablet or computer will just do right for such payments. Lenders support several hassle-free digital payment methods today, including UPI, IMPS/RTGS, debit cards and net banking.

  • Attractive terms and conditions

Borrowers who choose this mode of financing can take advantage of better repayment terms, which includes interest levied on the loan principal at affordable rates. It helps reduce a borrower’s overall liability.

Additionally, one can also reduce the total interest payable on such loans by one of the following methods –

  1. Paying off your credit before its due date
  2. Making increased principal payments
  • Greater flexibility in loan repayments

A borrower is free to pick the tenure for his/her gold loan from a range of term options. Consumers can also avail additional repayment options, which are usually unavailable in the case of other forms of credit.

For example, a borrower can choose to pay the dues at once at the end of the term instead of every month. Therefore, borrowers can easily remain free from any financial strain during their gold loan repayment period.

Availing a gold loan from Rupeek Fintech Private Limited is also extremely safe and secure. Collection of the pledged gold is done by a representative sent to the borrower’s residence and the representative leaves only after the loan amount is credited into the borrower’s account.

With more convenient terms and repayment facilities, it is only natural that gold loans are becoming more popular than ever. So, it may just be the right time to utilise the equity in your gold jewellery to raise finance for immediate funding needs.

India’s affair with gold and its vanity is known for ages and continues to date. According to a Business Line report, consumer demand for gold in the country was around 760 metric tons in 2018, second only to China’s demand of 994 metric tons. Nevertheless, in most cases, this precious metal ends up in Indian lockers or safes, with minimal use of the asset.

However, with the introduction of the gold loan facility by some reputed fin-tech platforms, consumers are slowly starting to appreciate that they can monetise their gold ornaments without outright selling them. Hassle-free and affordable gold loans are becoming the go-to option for many during financial urgent funding needs.

Still, repaying such loans can be a concern for borrowers. With innovative repayment solutions, however, reducing this liability is more convenient than ever. Before proceeding to learn more about the various gold loan repayment procedures, here is a brief idea about gold loans in general.

What is a Gold Loan?

A gold loan is a secured lending option gold owners can utilise to secure financing against the pledge of this precious Jewel or ornaments. The financial assistance so received is based on the weight and current market value of their gold items.

In most cases, a gold loan borrower needs to pledge gold ornaments of a certain quality or standard. Rupeek Fintech Private Limited, a well-known gold loan provider, allows its consumers to pledge gold jewellery that is classified between 18 carats and 22 carats in terms of purity.

Gold loan repayment period tends to vary from one financial institution to the next. Nonetheless, these short-term loans usually range up to 1 year in most cases, allowing borrowers to release their asset within a short duration on repayment of the total liability. Minimum repayment term may even be three to six months in some instances.

Different Types of Gold Loan Repayment Procedures

Unlike most loans, gold loan consumers can receive greater flexibility when it comes to repaying their outstanding dues. Before you avail such credit, ensure you go through the various repayment options carefully.

  • Interest payment

Under this option, a borrower can opt to clear only the interest applicable toward this loan, as per the EMI schedule decided by his/her lending institution. For instance, you decide to borrow Rs. 1 Lakh as a gold loan, which accrues a monthly interest of Rs. 3,000 for 4 months.

If you opt for an interest payment option, you would only need to pay Rs. 3,000 as EMI for this advance. At the end of your gold loan repayment period, you would need to clear the entire principal amount (Rs. 1 Lakh) at once.

Such a procedure can significantly reduce the financial strain on the borrower by limiting liability during the repayment tenure. You must, however, be ready to either repay the principal as a lump sum amount at the end of this period or renew it.

  • Bullet repayment

Another specialised form of repayment, bullet repayment option allows a borrower to defer both the principal and the interest amounts on the gold loan up to the tenure’s end.

For instance, if your loan tenure is six months, with bullet repayment gold loan, you do not need to service your loan until the tenure runs out. At the end of this period, you would need to clear the principal and accrued interest, at once.

Bullet repayment option serves helpful for borrowers who lack immediate financial support to start loan repayments from the get-go. The loan term thus buys you time to arrange for the necessary funds and pay at the tenure’s end to release the pledged gold.

Interest here is calculated monthly for such repayments, even though a borrower does not repay in instalments.

  • Part prepayment and foreclosure options

Besides the interest and bullet repayment gold loans, one can also go for facilities such as part prepayment and foreclosure. The former refers to paying a part of the principal and interest portion of a loan before its due date. If you decide to close the loan account by paying the total outstanding balance before the tenure runs out, it is known as foreclosure of a loan.

Reasons that Make Gold Loans Popular

Rupeek can be a suitable lender for gold loans as it provides several beneficial features to simplify repayment of the advance. These aspects ensure ease when clearing dues and releasing the pledged jewellery.

You can look forward to the following facilities when making repayment of your gold loan –

  • Digital modes of repayment

Gold loan consumers can repay their loan from the comfort of their homes via the dedicated app. An internet connected device like a smartphone, tablet or computer will just do right for such payments. Lenders support several hassle-free digital payment methods today, including UPI, IMPS/RTGS, debit cards and net banking.

  • Attractive terms and conditions

Borrowers who choose this mode of financing can take advantage of better repayment terms, which includes interest levied on the loan principal at affordable rates. It helps reduce a borrower’s overall liability.

Additionally, one can also reduce the total interest payable on such loans by one of the following methods –

  1. Paying off your credit before its due date
  2. Making increased principal payments
  • Greater flexibility in loan repayments

A borrower is free to pick the tenure for his/her gold loan from a range of term options. Consumers can also avail additional repayment options, which are usually unavailable in the case of other forms of credit.

For example, a borrower can choose to pay the dues at once at the end of the term instead of every month. Therefore, borrowers can easily remain free from any financial strain during their gold loan repayment period.

Availing a gold loan from Rupeek Fintech Private Limited is also extremely safe and secure. Collection of the pledged gold is done by a representative sent to the borrower’s residence and the representative leaves only after the loan amount is credited into the borrower’s account.

With more convenient terms and repayment facilities, it is only natural that gold loans are becoming more popular than ever. So, it may just be the right time to utilise the equity in your gold jewellery to raise finance for immediate funding needs.