Gold Loan Repayment Through Credit Card

How to Repay The Gold Loan Through Credit Card?

Gold-backed credits have significantly gained popularity in the last few years, especially during the pandemic crisis. The traditional lending and borrowing arrangement of gold articles have transformed into modern financial ecology.

What makes gold-backed credits unique among all financing options is their easy availability and eligibility, flexibility of fund usage, quick processing, and multiple repayment options. Furthermore, affordable gold loan interest rate are one of the highlighting features of this credit option.

Read along to know about the flexible repayment option of a gold loan through a credit card.

Steps to repay gold loan through credit card

There is no question of denying that gold is a crucial financial asset in terms of investment source and growth. Choosing a gold loan in India is one of the best ways to mitigate monetary exigencies. As already mentioned, this credit option is accompanied by easy eligibility parameters, which means that anyone can apply for the advances by mortgaging their high-value gold articles as collateral.

Moreover, it is easy to pay off gold loans as the valuable collateral enables lenders to impose competitive gold loan rates in comparison to other unsecured loan variants. Besides, a loan against gold ensures faster processing and involves minimal documentation. Since gold loans are convenient to process and approve, financial institutions have come up with multiple repayment options. Although repayment options tend to vary across lenders, it is essential to have prior knowledge about the repayment methods so that you can select the most appropriate one for you. Therefore, to know about the detailed steps of repayment methods, read on the illustration below:

Pay interest as EMIs and principal on maturity

This is the first gold loan repayment wherein individuals can pay off interest at regular intervals (monthly/ quarterly) and repay the entire principal amount at the tenor’s end. One can choose the interest payment interval by assessing his/ her financial capability. Such a provision is beneficial for the borrowers as they do not have to worry about principal repayment throughout the tenor and are only liable to pay off the interest component. Thus, before applying for the credit, individuals must thoroughly research and compare gold loan interest rates offered by lenders and select the one that suits their repayment capacity.

Making partial payments

Adhering to the EMI schedule is not necessary for this kind of repayment schedule as individuals can make partial payments of both principal and interest components whenever they desire. This is purely a customer-centric approach for gold loan customers. Irrespective of the pre-fixed EMI pattern, customers can pay off partial or complete payment of both interest and principal components. If one chooses to repay their principal sum initially, then the payable interest that is calculated based on the loan outstanding significantly reduces. In this way, one can save substantial serviceable interest.

Bullet repayment

In this method of repayment, individuals can choose to repay the overall amount of both principal and interest amount at the tenor’s end. Therefore, customers have to worry about the repayment throughout the tenor. Besides, one is not required to conform to the EMI schedule and can repay the entire amount when the loan tenor ends. Although the interest amount is evaluated each month, it is payable only when the tenor ends. Since the entire repayment is made in a single shot, it is known as a bullet repayment plan.

Traditional EMI method

This traditional method of gold loan repayment is customised for salaried individuals with a stable income source. In this method, the EMI includes both principal and interest components and is paid every month.

In general, gold loans do not have any lock-in periods and are accompanied by shorter tenors. Therefore, individuals opting to pay gold loans online can choose any repayment methods that suit their financial capacity.

Furthermore, to ensure hassle-free repayment throughout the tenor, individuals can take 3the help of a gold loan EMI calculator to determine the EMIs and payable interest beforehand and manage their finances accordingly. By having prior knowledge about the EMIs, individuals can measure their financial liability and choose loan amount based on their financial standing.

Therefore, to conclude, individuals can choose to repay both the principal and gold loan interest component in any of the above-mentioned methods with the help of a credit card. However, one must plan their repayment carefully and pay credit card bills on time to avoid a debt trap.