Maximum Tenure for Gold Loan

Last Updated: 15 Oct 2024

Gold loans are secured advances with quick repayment terms that make it easy for borrowers to get capital. It makes it simple to take care of immediate financial needs. Even with the greatest lenders, a gold loan’s maximum term never exceeds five years. This means that if you take out a gold loan, you must be prepared to pay back the advance quickly.

High-value financing, a high loan-to-value ratio, flexible repayment choices, and affordable interest rates are further salient characteristics of gold loans. Some lenders offer fixed-tenor gold loans, relieving borrowers of the burden of worrying about the minimum and maximum tenor of a gold loan.

Before applying, make sure to inquire with your financial institution about the possibility of tenor flexibility.

Mode of payment: Long-term vs Short-term

You can pay off the loan in a maximum of 24 payments if you choose monthly installments. This indicates that the longest Gold Loan term possible is 24 months. You can repay the loan before the end of your chosen duration, even if you choose shorter loan repayment terms, like 12 months. As long as you make a minimum of three instalments, banks won’t charge you any fees if you pay off the loan before the selected tenure.

You would be eligible for a maximum repayment period of 6 months at a fixed interest rate if you choose a short Gold Loan tenure. When the six-month loan term is up, you can pay off the full debt in one big sum. If you opt to prepay the loan after six months, the prepayment penalty is also not applicable in this case.

Can you extend your gold loan tenure?

The repayment plans provided by lenders are frequently tailored to the borrowers’ income sources. Usually, a person cannot change the tenure of his/her gold loan, but this may change depending on the lender.

In the case of gold loans, borrowers have the choice of making equal monthly payments or just the interest component up front, with the principal due at the end of the loan’s term. If the gold loan is repaid through EMIs, the lender offers a somewhat longer duration; however, if it is repaid by bullet payments or a lump sum at the end of the tenure, the lender offers a shorter tenure.

The maximum tenure for a gold loan

One lending institution may have a maximum tenor for gold loans while another may not. While the minimum term for gold loan repayment is specified at no less than 6 months, some lenders provide tenors stretching up to 2 years or 24 months.

The fixed tenor’s term of 12 months strikes the ideal balance between giving the borrower enough time to manage repayments reasonably and without pressuring them into doing so.

Use specialized financial tools, such as the gold loan EMI calculator and the gold loan per gram calculator, to better evaluate your loan choices before applying for a gold loan. Make sure to budget your repayments so that you can pay your EMIs on schedule.