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Steps to pay up your Gold Loan faster than the given tenure
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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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Gold loans have gained popularity in recent times for a number of reasons – quick loan sanctions being the major one. A gold loan is extremely convenient for those in need of urgent cash as they do not take very long to be processed. They can be availed even if you do not have the most impressive credit history; all you need is just gold. A gold loan does not have a very long repayment tenure, and typically get over within five years. You must know that other loans come with a penalty on prepayment. That is, if you attempt to pay off the loan amount before the stipulated tenure, you may be charged a fee by the bank. This does not apply in case of gold loans. In reputed financial institutions, finance experts will guide you through the ways in which you can pay off your loan before the repayment tenure ends and claim ownership of your jewelry quicker.
Partial payments
Gold loans are often more flexible than other loans and you can choose to make partial payment of both interest and principal amount from time to time. It’s not crucial to conform to the schedule of Equated Monthly Installment and it’s a customer-friendly approach that makes your job easier. Complete repayment of both interest and principal amount is allowed irrespective of the EMI schedule that had been set at the time of sanctioning the gold loan.
Bullet repayment method
In case of the Bullet Repayment method, you will be required to repay the entire amount of the loan at the end of the loan term. This means that you do not have to be bothered by monthly payments of either interest or principal amount. This gives you enough time to put the whole amount together without worrying about putting the money together for EMIs every month.
Regular EMI option
You must also understand that while your gold loan eligibility is not dependent on being a salaried individual, a lot of customers avail the loan with regular EMI option. Even for these individuals an unforeseen inflow of cash could be used in prepaying the loan. Plain
Deposit of outstanding
Most gold loans do not come with a particular lock in period and that is why there are no limitations posed on prepayment of such loans. Apart from the aforementioned options, it is also possible to put together the money needed for repayment when you require your ornaments back and deposit it. This amount includes the principal amount that was borrowed and the culminated interest that will be charged on the principal. Doing so will ensure the closure of account and once that has been confirmed by your bank’s manager, you’ll be handed your ornaments back. So wait no more! Opt for the customer-friendly gold loans now!
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