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Summary: Gold loan durations typically range from as short as 1 day to 12 months, depending on the lender and the loan scheme chosen. Some banks may offer longer tenures up to 24 or even 36 months for specific schemes. Repayment can be made in a lump sum or bullet payments, and some lenders allow tenure extensions if needed. Always confirm terms with your lender to choose the best option for your needs.
A gold loan is a way to borrow money by pledging your gold items, such as jewellery, coins, and more, to a financial institution or an individual lender. The lender holds your gold safely while you repay the loan amount, including the interest.
When applying for a gold loan, one of the key things to consider is the loan tenure. This is because the right gold loan tenure allows the borrowers to accumulate the funds required to release their pledged assets.
Different lenders provide gold loans with different tenures. So, to help you make a smart choice, this blog will take a look at the typical gold loan duration.
What is the Minimum Tenure on a Gold Loan?
The gold loan minimum tenure can vary depending on the lender. For example, Manappuram Finance Limited offers gold loans with a short minimum tenure of just 1 day. This means you can repay your gold loan within a day of taking it.
In such cases, borrowers like Manappuram Finance Limited are charged interest for only a day. This flexibility intrigues customers who can repay the loan and release their collateral whenever they have enough funds to clear their loan.
But keep in mind that the tenure of your gold loan depends on the specific loan scheme you choose. Hence, it is always advisable to check with your lender on their gold loan minimum tenure before opting for one. This clarity helps you make better financial decisions.
What is the Maximum Tenure on a Gold Loan?
Just like the minimum tenure, the gold loan maximum tenure also differs from lender to lender.
While some lenders give you a shorter period to settle your loan, others, such as Manappuram Finance Limited, let you take up to 1 year to repay the loan.
You can either pay back the loan in one go or break it down into smaller. This flexibility is a lifesaver, especially when unexpected expenses pop up.
By spreading out your payments, you can avoid feeling overwhelmed and stay on top of your finances.
Can You Extend The Gold Loan Tenure?
Manappuram Finance Limited lets you extend the due date of your loan on your request. You can get up to 90 extra days to pay back your loan.
Thanks to this facility, you can get much-needed time to sort out your finances and get back on your feet without the constant stress of an overdue loan looming over you.
Factors Affecting Gold Loan Tenure
- Loan Amount: The amount you borrow can affect your loan tenure. If you are borrowing a hefty amount, you can opt for a longer repayment period if the lender provides that option.
- Lender’s Policies: Different financial institutions have different policies regarding gold loan duration. Some lenders offer a rigid gold loan minimum tenure, while others are flexible. Similarly, the maximum tenure also varies from lender to lender.
- Higher Interest Rates: Higher interest rates make long-term borrowing costlier. Hence, lenders may offer shorter loan tenures to help you manage the overall repayment burden.
- Repayment Plan: Your repayment plan also affects your loan tenure. You can opt to pay for your loan in one lump sum (on maturity) or by bullet payments to manage your payments better.
Conclusion
Understanding the typical gold loan duration is important when you are planning to borrow money using your gold as security.
Different lenders have different rules about how short or long this period can be. To avoid any surprises, it is essential to talk to your lender and understand their specific terms before taking a gold loan. This way, you can choose a loan that fits your needs and repayment ability.