Since gold loans have easy-to-meet eligibility criteria, it wouldn’t be wrong to say that almost anyone can secure funds by pledging their ornaments as collateral. Lenders charge lower interest rates on this credit facility than any other form of unsecured personal loan. Upon repayment, the creditor returns the asset.
Precisely due to the asset-backed nature, gold loans have a lower cost of borrowing, which makes them a suitable option for most borrowers. That said, repaying a gold loan can sometimes become burdensome owing to other financial obligations. So, let’s check out some of the ways to manage gold loan repayment efficiently.
What Are the Best Ways to Reduce Gold Loan Repayment Burden?
Here are 6 simple ways to manage gold loan repayment smartly:
- Borrow the exact amount you require
- Opt for bullet repayment
- Prioritise monthly repayments
- Opt for a shorter tenure
- Make prepayments or part payments
- Refinance with lower interest rates
Let’s take a look at these in detail.
● Borrow the exact amount you require
It is important to ensure one applies for the exact loan amount that is required. Nothing more, nothing less! Over borrowing can become cumbersome. One will have to pay interest on the excess loan amount.
New applicants must always make it a point to estimate the required amount to avoid paying higher interest charges. Keep in mind that the lower the loan amount, the lower is the levied interest rate. Even if you are eligible for a high loan amount, sticking to the requirement is important.
Applicants can use an online gold loan calculator to determine the maximum loan amount they are eligible for by pledging their gold jewellery.
● Opt for bullet repayment
In case individuals opt for a bullet repayment plan, they can pay the principal amount along with interest at the end of the loan tenure. One does not need to follow any EMI schedule. Since borrowers repay the loan in one go, this type of repayment is known as a bullet repayment plan.
● Prioritise monthly repayments
Once the estimated loan amount requirement is finalised, individuals must look for a lender offering the highest gold loan rate per gram at an affordable interest rate. Since the applicable rate of interest directly impacts the monthly amount payable, it is of utmost importance to conduct thorough market research before zeroing in a lender. The higher the levied interest rate, the higher will be the EMIs.
● Opt for a shorter tenure
Unlike the rate of interest, the loan tenure is inversely proportional to the EMI. In other words, if borrowers opt for longer repayment tenure, they’ll have to pay lower EMIs, whereas a shorter tenure increases the monthly instalment amount.
● Make prepayments or part payments
One of the best ways to make considerable savings on gold loans is through part-prepayments. Reputed lenders usually levy zero charges on gold loan part-prepayments. Existing gold loan customers can make small part-prepayments as and when by utilising additional funds, like returns generated from investments, freelancing projects, etc. Every part-prepayment over and above the EMIs gradually decreases the principal amount, making repayments convenient.
One can also foreclose the gold loan to save on the interest outgo. However, in the case of loan foreclosure, one must note that financial institutions may impose foreclosure charges. In this regard, it is wise to look for a lender that offers zero to negligible part-prepayment or foreclosure charges.
● Refinance with lower interest rates
This is also a feasible option to manage gold loan repayments. Existing customers repaying gold loans at a high rate of interest can opt for refinancing from a lender offering comparatively lower interest rates. This will help them make substantial savings on the ongoing loan.
Though interest rates play a key role with regard to the EMIs payable, this should not be the only criterion taken into consideration while applying for a balance transfer. One must note that loan refinancing is just a fresh loan application with a new lender. So, the entire process of loan sanctioning begins again, this time only less stringent than the first application. Keep in mind that the processing charges and other associated fees must also be taken into account.
Also, opting for a loan refinancing towards the end of the tenure leads to further borrowing expenses. Hence, all these factors must be considered before planning for a gold loan balance transfer. One must read all terms and conditions thoroughly before opting for this option.
Alongside, you should also know more about gold loan balancer transfer for a smoother experience down the line, if necessary.
How Does Rupeek Help in Easier Gold Loan Repayment?
Rupeek offers low-interest gold loans for every need starting at 0.49% per month. The aim is to provide a hassle-free and convenient gold loan borrowing experience for its customers. Many borrowers opt for a gold loan transfer with Rupeek to get various benefits. Let’s check out the advantages in detail.
What Are the Benefits of Opting for a Gold Loan from Rupeek?
Here are the benefits offered by Rupeek:
● Flexible mode of repayment
Opting for a lender offering a flexible repayment structure makes gold loan repayments affordable for borrowers per their financial capabilities. Individuals can choose to repay any amount at any time during their tenure with EMIs. One can also take advantage of Rupeek’s one-time bullet payment facility.
● Compact repayment tenure
Gold loans are one of the most preferred options for potential borrowers seeking maximum loan amounts for the short-term. With Rupeek, borrowers can opt for a 6-month repayment window, extendable up to 12 months. One added benefit of this short-term loan is that it reduces interest outgo, helping customers make maximum savings on their loans.
● No prepayment or foreclosure charges
Reputed lenders allow customers to make part-prepayments of their outstanding loans at zero additional charges. Rupeek offers the same! Customers can foreclose their loans without incurring any extra charges.
● Competitive interest rates
When it comes to loans, not speaking of interest benefits is next to impossible. Since the monthly payable is dependent on the levied interest rates, opting for a lender offering the lowest rate of interest is an absolute must. Speaking of which, Rupeek offers gold-backed loan schemes at market-best interest rates starting at 0.49% per month.
● Convenient online gold loans
When you opt for a gold loan from Rupeek, the best part is the availability of an online application process. Rupeek offers doorstep services to ensure a hassle-free experience.
While you’re at it, you should also know about the differences between gold loan and personal loan for better understanding.
● Collateral safety
Many are hesitant when it comes to pledging gold ornaments. However, there is no need to worry when it’s Rupeek. The company offers complete safety of the pledged asset with ISO 9011:2015 certified gold handling procedures. The collateral is safely transferred to the nearest branch of a partner bank in a GPS-enabled bag. They are then stored in high-security vaults under 24x7 surveillance. In case of any damage, Rupeek offers 100% insurance cover for all the pledged ornaments and jewellery.
With Rupeek, customers can enjoy the above-mentioned benefits on their gold loans while reducing their repayment burden considerably. If you require funds urgently, all you need to do is place a request via Rupeek.