Gold Loans are becoming increasingly common in India. For one, a Gold Loan is a great way to arrange funds to finance your various needs – be it for a medical emergency, a business deal or any other such reason, where you need cash instantly. Secondly, since you would be pledging your assets, these loans come with lower interest rates and flexible repayment schemes. Unlike most other loans, you don’t need to only rely on Equated Monthly Instalments or EMIs to repay your Gold Loans. Here’s a look at four different Gold Loan online payment schemes you can choose to repay your loan.

 

1. Pay off the interest in EMIs and repay the principal amount at the end of the loan tenure

As a Gold Loan borrower, you can select a Gold Loan repayment option that enables you to pay off only the interest component of the loan in monthly instalments, as per the EMI schedule designed by the lender. You can then pay off the entire principal amount taken as a loan, as a lump sum amount, at the end of the loan tenure. Such an arrangement can indeed prove to be fruitful as it reduces the pressure of substantial monthly instalments. You need not worry about repaying the principal amount until the loan matures.

 

2. Make partial payments of the principal amount and interest component flexibly

Another Gold Loan repayment procedure you can follow is to make partial payments of both the principal amount borrowed and then pay the interest rate as per a flexible repayment schedule that you deem fit. You do not need to conform to a fixed monthly instalment schedule if you opt for this type of repayment option, which follows an innately customer-centric approach. You can simply set up a Gold Loan online payment scheme with your lender (linked to your loan account) and make partial or complete payments of both the principal amount and the interest component as per a repayment option that suits you. A great way to reduce the outstanding loan amount is to repay your principal amount initially and then pay the total interest. This is because the interest pay-out is typically calculated daily. But opting to pay your principal amount first, you can save a lot of money on serviceable interest.

 

3. Opt for a basic bullet repayment scheme where you can repay the entire loan as a lump-sum amount

The Gold Loan online payment option can also be leveraged by opting for the bullet repayment scheme. The bullet repayment method simply means that you can repay the entire loan amount, i.e. the principal amount and the interest charged on it in a single lump sum, at the end of the loan tenure. As such, there is no need to pay monthly instalments at all. Simply repay your loan and get your gold back from the bank, in one shot. If you opt for the bullet Gold Loan repayment scheme, the bank calculates interest for each month; however, you only need to pay it when the loan term ends. Note that the bullet repayment scheme is generally applicable only on short-term loans, typically those that you can repay within six months.

 

4. Pay monthly instalments comprising of the principal amount and interest rate

The final Gold Loan repayment procedure you can follow is the most basic one in which you can pay a part of the principal amount and the interest component in equated monthly instalments. This repayment scheme is typically created for salaried borrowers, i.e. people receiving an inflow of cash into their bank accounts every month.

Things to remember about repaying your Gold Loan

While the article speaks of the different ways or methods in which you can repay your Gold Loan, you should also be aware of how loan transactions or instalments can be paid. Some lenders allow you to repay the loan EMIs in cash, while most others provide a wide range of Gold Loan online payment options. For instance, you can set up the auto-debit facility to pay monthly EMIs. You can also pay the instalments through an app if your bank has the option. A few banks are also leveraging WhatsApp Banking (which is different from phone banking), wherein, you can send your queries about loans you need and the various repayment options.

 

Final note: As is evident, there are various offline and Gold Loan online payment methods. Ensure you choose a Gold Loan repayment schedule that best suits your requirements. In case you have any queries, you can contact your bank for assistance. At HDFC Bank, we offer competitive interest rates on Gold Loans along with flexible repayment schemes. Apply for Gold Loan today and fulfil your financial needs on your own like business needs, unexpected expenses, or bill payments.

 

The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.

They say, “All that glitters is not gold.” While this may be true in most cases, when Indian festivals come around, you can be sure that the glittering yellow metal hanging off people’s necks and hands is indeed, gold