What is the maximum tenure for gold loan?
Gold loans are secured advances with short repayment tenures that allow borrowers to avail funding readily. It helps address urgent financing needs with ease. Other prominent features of gold loan include high-value financing, high loan-to-value ratio, multiple repayment options and low gold loan interest rate.
Some lenders provide gold loan with fixed tenures, eliminating a borrower’s need to worry about the minimum and maximum tenure for a gold loan. Make sure to check with your financial institution about the availability of tenure flexibility before applying.
Maximum tenure for gold loan
The gold loan maximum tenure varies from one lending institution to another. Some lenders provide tenures extending up to 24 months for gold loan repayment, while the minimum limit is set at not less than 6 months. With Bajaj Finance, the maximum limit and minimum limit of repayment tenure for gold loans do not apply as the repayment period is fixed at up to 12 months.
At 12 months, the fixed tenure provides the right balance of repayment duration without hurrying the borrower into repayment and allowing ample time to manage repayments affordably.
When applying for a gold loan, use dedicated financial tools like the gold loan calculator and the gold loan per gram calculator to assess your loan options better. Plan your repayments so that you can make timely payments. A well-managed gold loan can be a great way to boost your credit score whether you are new to the borrowing sector or not.
Read Also: How can a gold loan help you start a small business
Can you extend the gold loan tenure?
Extension of gold loan tenure is not possible with Bajaj Finance as the repayment period is fixed. To manage your loan repayments affordably, make sure to select the loan amount after due consideration of instalments payable, interest accrued, and the total loan liability.
The gold loan maximum amount for a Bajaj Finserv Gold Loan can go up to Rs. 2 crore, with one of the highest per gram rates in the industry. The loan amount available for an individual can vary with the weight of gold, its purity, and the per gram rate available on the day of the gold loan application.
Eligibility for gold loan
Individuals need to fulfil simple criteria as to eligibility for gold loans to avail of the advance. Following are some standard requirements to fulfil.
- Nationality: Indian
- Age: 21 to 70 years
- Gold purity: 18-22 karat
Bajaj Finance offers gold loans against 22-karat gold jewellery and ornaments only. Gold bars and coins do not qualify as assets to pledge to avail a gold loan. Make sure to meet the minimum eligibility requirements and arrange all necessary documents before applying for streamlined processing of your loan application.
Factors affecting gold loan tenure
When applying for a gold loan in Hyderabad, the loan tenure depends on several key factors:
- Lender’s policy – Bajaj Finance offers gold loan tenures typically ranging up to 12 months, depending on their policies.
- Loan amount – Higher loan amounts may come with convenient tenure options, while smaller loans often have shorter durations.
- Repayment plan – Borrowers can choose from monthly, bi-monthly, quarterly, half-yearly, or annual repayments, impacting the tenure.
- Gold value and LTV ratio – The loan-to-value (LTV) ratio affects tenure, as higher LTV loans may have shorter repayment periods.
- Interest rates – Higher interest rates might necessitate shorter tenures to minimise repayment burden.
Read Also: How does the gold rate affect your gold loan
Frequently asked questions
If you are unable to repay your gold loan within the specified gold loan maximum tenure, your pledged gold may be auctioned to cover the outstanding amount. To avoid losing your pledged gold jewellery, it is important to choose your repayment options carefully.
With Bajaj Finance, you have the convenience of planning your gold loan through a tenure of 12 months, wherein you can choose to pay the gold loan interest monthly, bimonthly, quarterly, half-yearly, or yearly. It is important to note that principal and interest are to be paid post-mortality.
With Bajaj Finance, you have the convenience of planning your gold loan through a tenure of 12 months, wherein you can choose to pay the gold loan interest monthly, bimonthly, quarterly, half-yearly, or yearly. It is important to note that principal and interest are to be paid post-mortality.
The tenure of a gold loan plays a crucial role in determining the applicable interest rate. Generally, shorter tenures come with lower interest rates, as the lender’s risk is minimised. On the other hand, opting for a longer tenure may result in slightly higher interest rates since the loan remains outstanding for an extended period, increasing the lender’s exposure. Additionally, a longer tenure means more interest accumulation over time, leading to a higher overall repayment amount. Borrowers should carefully choose their tenure based on their repayment capacity and financial planning.
If a borrower fails to repay the gold loan within the agreed tenure, the lender may impose penalties or additional interest on the overdue amount. Continued non-repayment could lead to legal notices and, eventually, the auctioning of the pledged gold to recover the outstanding dues. Some lenders offer a grace period or restructuring options, but these come with extra charges. To avoid losing the pledged jewellery, borrowers should opt for repayment schedules that align with their financial capabilities.
With Bajaj Finance you can repay a part of your loan in advance or pay the entire amount at no extra cost.
