Gold Loan Repayment Terms: What You Pay and How Much
Gold isn’t just there to look nice! For thousands of years, gold jewelry and bullion have played a critical role in securing finances during times of uncertainty.
With the COVID-19 pandemic still in full swing, gold loans have become an increasingly popular way to borrow money: customers benefit from quick disbursal, no restrictions on the end-use of funds, and easy approval. But how do you repay gold loans and what should you expect to pay back on a monthly basis?
A wide range of repayment options makes gold loans a more flexible option compared to bank loans. There are a number of repayment options with different terms, interest rates, and other factors.
“Will I end up paying too much interest on my gold loan?”
“What’s the cost of financing for my gold loan?”
“What are the repayment options you provide?”
Many Vasco customers ask us these questions, and the answer is simple: every Vasco loan is unique. While there isn’t a single, definitive answer to these questions, we wanted to use this blog post to provide you with a general understanding of the repayment options you have. At Vasco, we generally offer loans under the balloon payment method. This is how they work:
You’ll pay interest on a monthly basis and the principal later. This is a great option if you’re looking to minimize your monthly cost of finance.
The key advantages of getting a balloon loan from Vasco
We offer balloon financing because of the flexibility that’s built into this approach. When you get a Vasco balloon loan, you’re only paying the interest on a month-to-month basis until maturity. This prevents the loan from turning into a monthly cost center, giving you the flexibility to keep moving forward. This means more cash on hand every month and the ability to carefully plan for the final balloon payment.
What does the payment schedule look like?
Your gold loan payment schedule is dependent on loan tenure. The principal borrowed will then need to be paid, in full, at the time of maturity. Interest, however, will be due month to month, with this amount varying based on how long your loan is for.
What about your loan tenure? The length of your loan period depends on a number of factors – whether you have a short-term liquidity need or a long-term need,
and a number of other factors. At Vasco, we’ll sit with you to come up with the best gold loan option for your specific situation. When you regularly pay your monthly fee on time, we’re willing to go the extra mile and extend your loan tenure as long as you remain in good standing.
We talked about the valuation of your gold jewelry and other collateral in the article, How much is my gold actually worth?
Take a look here to get a better understanding of how we decide on your loan principal, and how that relates to your gold valuation. (Link to that article). We leverage XRF technology to assess gold purity and to give you a precise number in terms of what your gold is worth. This means you’ll always get a Vasco gold loan that scales with the true value of your gold assets.
Will I end up paying too much interest on my gold loan? This is a question we get a lot, and particularly in comparison to bank loans. Here’s the answer: interest rates on Vasco gold loans tend to be higher than a bank loan. However, interest rates are lower than what you pay for your credit card – that’s the range we’re looking at. If you opt for a shorter loan period and if you don’t extend, you will save considerably in terms of paying interest. Moreover, banks often do “hard pulls” on your credit score to assess availability, which can cause it to drop in the short term. You won’t run into this risk with a Vasco loan.
You can contact us for a free valuation of your gold and we can even help you determine the asset that would serve best as collateral in a given situation. Check out this article (link toWhat Are The Best Luxury Assets to Use as Collateral? Vasco Helps You Decide.) to learn more about that: from Rolex watches to vintage cars, we can also help you get a secured personal loan with a range of other luxury assets as collateral.
As you can see. there is no single answer if you’re wondering about repayment terms. At Vasco, we aim to offer competitive interest rates, flexible repayment methods, and viable terms.
Every Vasco client is unique, just like every Vasco gold loan. Whether you’re looking for a small personal loan or business financing, we’ll work with you to tailor your gold loan to meet your liquidity needs, with a comfortable and viable repayment approach. Reach out today! We’ll set you up with a free gold valuation.