Gold is one of the most desired investments both in India and worldwide. This yellow metal is preferred by every Indian household for its ornamental use and investment source. When most loan sectors are struggling due to the economic downfall owing to the pandemic in the last two years, gold loans witnessed a massive y-o-y growth of 132% to Rs. 43,141 crore during last year. Being the most secure collateral, the demand for this particular credit facility is always stable irrespective of the market conditions.
Furthermore, to maximise the benefits of this financing option, individuals can use a gold loan calculator to determine the EMIs beforehand and manage their finances accordingly.
How is the interest rate calculated for gold loans?
Among many financial products available in the market, a loan against gold is considered a unique financial product due to its easy availability, affordable interest rate, and flexibility in fund usage. In addition, this credit instrument can be obtained against gold items that enable consumers to utilise the equity to meet various monetary requirements.
However, to avoid repayment burden in the long run, individuals can take assistance from gold loan calculators, which will allow borrowers to know their monthly instalments and payable interest amount. By using this calculator, individuals can measure their repayment liability beforehand.
Moreover, with the help of this calculator, individuals can evaluate their gold loan interest by subtracting the principal sum from the overall outstanding amount. This online tool will allow borrowers to learn how interest rates significantly impact EMIs and the total outstanding amount. Besides, individuals must know that the determinants that affect interest rates are principal amount and repayment tenor. Also, interest rates also depend on the chosen lending institution.
Almost every financial institution offers gold loan calculators on their websites, which are free and simple. An online calculator has respective fields where individuals need to input information such as loan amount, tenor, interest rate, net weight of gold articles, gold carat, and the payment method to determine the monthly instalments and interest component. Apart from EMIs and interest amount, these online tools offer better insight into a specific loan offer through an amortisation schedule which displays a detailed EMI break-up throughout the loan tenor.
Alternatively, individuals can also use an online gold loan eligibility calculator to determine the amount they are eligible for. Knowing the eligible amount beforehand will allow borrowers to structure and manage their finances accordingly.
Benefits of gold loan calculator
With the assistance of a gold loan calculator, one can conveniently calculate gold loan instalments against pledged gold items anywhere without any cost. Therefore, it is always better to choose these online calculators over manual evaluations to obtain more accurate and reliable results. This online calculator uses a simple mathematical formula to calculate the EMIs and display results within a few seconds. Some of the benefits of this online instrument are discussed below:
Quick and accurate results
Although the borrower always has the opportunity to calculate gold loan EMIs manually, doing so can lead to inaccurate results because of the complexity of the calculation. However, this online calculator performs efficiently, completes the task within seconds, and provides accurate results. Furthermore, this online tool leaves no room for even minor errors as the entire calculation is done by a machine. As a result, borrowers should always rely on these online tools to get accurate results.
Helps in financial planning
Since borrowers can have prior knowledge about the EMIs with the help of a gold loan calculator, individuals can make proper prepayment planning and manage finances accordingly. For instance, if individuals know about their EMIs beforehand, they can save an extra amount in a month and make prepayments with ease.
Besides, once individuals know about the amount they have to pay monthly, they can change the tenor and reach an EMI that will suit their financial capacity. This further helps in better repayment planning. In this regard, one can supervise their monthly fixed expenses and determine necessary financial obligations. Therefore, this calculator assists borrowers in making thorough financial planning which will further allow them to avoid penal interest and EMI bounce charges throughout the tenor.
This calculator offers prompt results. By entering the different loan components such as amount, tenor, interest rate, net weight of gold jewellery, gold carat, etc., the calculator will display error-free results easily.
Thus, with the help of this gold loan calculator, individuals can plan their EMIs and expenses.
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