Do you have any idea about the borrowing power of your gold ornaments? Here borrowing power means the loan amount you can get against your ornaments with the help of a Gold Loan. Several banks and financial institutions provide the facility of Gold Loan to the customers at an affordable rate of interest. Among the customers, Union Bank Gold Loan is quite popular because of several reasons: Higher loan amount, affordable interest rates, flexible repayment methods, minimal documentation, etc. People like to opt for a Gold Loan because first, it is a secured loan so they don’t have to fulfill the strict eligibility criteria as an unsecured loan.
An individual can get the required loan amount by just going to the branch and submitting his or her gold to the lender. Union Bank Gold Loan can be taken for both priority and non-priority sectors. One of the most amazing features of a Gold loan is its different repayment methods that customers can opt for according to their convenience and repayment capacity. S0, what are these repayment methods and how do they work? We will discuss all of them in this article so that you can understand better. Let’s get to it.
In case of any loan, lenders provide a fixed tenure to repay the loan. One of the most common repayment methods is the EMI method where individuals pay a certain monthly installment that consists of a portion of principal and interest on the principal amount. But in the case of Gold Loan, there are three other repayment methods that lenders provide. We are showing all of them below.
Interest Payment at a Regular Interval and Principal Amount at the end of the Tenure
With this method, customers can choose to pay the interest amount at any of the regular intervals – monthly, quarterly, semi-yearly, or yearly basis – and pay the principal amount at the end of the tenure.
Upfront Interest Payment and Principal Amount at the end of the tenure
This method is a bit similar to the last method except customers need to pay the total interest amount upfront at the start of the loan. They can pay the principal amount at the end of the tenure. By opting for this method, you won’t have to worry about the payment during your tenure as you will only need to pay the principal amount at the end of tenure.
Regular Monthly Installment Payment
This is the most common repayment method for Union Bank Gold Loan. People who have a stable income flow generally opt for this method. They can pay both their principal and interest amount during the tenure through the Equated Monthly Installments (EMI). This amount will have a portion of the principal and a portion of your interest amount.
To know the EMI amount, customers can also use the Union Bank Gold Loan EMI Calculator that provides the exact EMI Results when you enter a few details like Required Loan Amount, Rate of Interest, and Tenure. Let us give you an example.
Suppose that you are taking a gold loan of INR 5,00,000 for a period of 24 months at an interest rate of 14.50% per annum. So when you put these details into the tool, you will get INR 2,412 as the EMI amount. So, this is the amount that you will need to pay every month.
Bullet Repayment Method
Now, let’s say you don’t want to pay anything during your tenure. Well, in this case, you can opt for the Bullet Repayment method with which you can pay both the principal and interest amount after your tenure completes. That’s why this method is known as the Bullet Repayment. However, the interest amount will be calculated every month by the lender which will be added to your principal amount of Union Bank Gold Loan.
Gold Loan can be one of the useful methods to improve your credit score if you are struggling with a poor score. Choose any of the repayment methods according to your convenience and repayment capacity.