Gold is one of the popular modes of investment across the world, particularly in India. Almost every household in India has this yellow ornament as it is a symbol of wealth and auspiciousness. This is why many can collateralise the metal to get funds to meet their borrowing needs. However, borrowing just any loan against gold proceeds without an effective plan of repayment can burden your finances as a borrower and can also lead to loan default. Here in this regard, using an online gold loan EMI calculator may be of big help for the prospective borrower.
What’s a gold loan EMI?
The full form of EMI is equated monthly instalment. Like for any financial option, in the case of a gold loan through IIFL gold loan or Muthoot or SBI, you are required to monthly repay the borrowed proceeds in the EMI form. Note that as the gold loan is secured in nature, the gold loan interest rate is even lower than unsecured loan options. For instance, IIFL gold loan interest rate starts from 11.88 per cent per annum, SBI gold loan interest rate starts from 9.15 per cent per annum, etc.
Besides this, lenders also allow other forms of repayment options wherein you may just pay the interest constituent first and repay the principal by the end of the repayment tenure or repay the entire loan proceeds at once towards the end of the loan tenure. Such repayment options are best for self-employed individuals with uncertain income flow.
Having prior knowledge regarding the periodical repayment proceed is crucial for those applicants looking to effectively plan out their finances over the repayment period. As an outcome, this lowers the chances of any delayed payments or defaults. An online instrument helping individuals to accurately compute the correct EMI figures is an online gold loan EMI calculator.
What’s a gold loan calculator?
A gold loan EMI calculator is nothing but an online tool that allows you to decide the possible monthly repayment funds that you may incur against your loan proceeds. Also, users can get a complete breakdown of the overall interest constituent and principal repayment through an online tool. Considering this, an online gold loan EMI calculator even performs well in the activity of interest calculation. All users just require to input their needed loan proceeds, preferred repayment tenure and rate of interest. Using this tool before opting for a gold loan allows you to choose the correct gold loan option as per your requirement and preference.
What’s the formula for computing the gold loan EMI?
An online gold loan EMI calculator makes use of simple formulas to allow loan borrowers to know their loan EMIs. Mathematically, this formula is as follows –
A = P X R X [(1+R) n / [(1+R) n – 1]
Here, A infers periodical EMI, P denotes principal amount, r is the rate of interest and n is the overall repayment tenure. Prospective borrowers of gold loans can even use this basic formula to compute their loan EMIs manually. However, manual computation is time-consuming and comes with the scope of manual errors, which is not ideal for any critical financial undertaking. By using the online automated EMI calculator, you can ease the whole procedure. If you are one of those willing to use the same for your computation, then you must ensure to visit an authentic website for accurate computation.
How can you use the online gold loan calculator to decide on the loan EMI?
A gold loan calculator is very simple to use and is accessible too. Almost all the issuers offer an online EMI calculator on their site with IIFL gold loan being no exception. To use this online instrument, you must first visit the gold loan computation page. Post this, you can proceed in any of the following ways based on the required details –
To get an idea about the required gold –
Step no. 1 – Hit on the tab “EMI calculation” on the online calculator page.
Step no. 2 – Next, input the required loan proceeds and select the apt rate of interest and repayment tenure.
Post this, the online calculator would display the gold loan EMI and interest constituent.
To know the loan proceeds, you qualify for based on your gold weight –
Step no. 1 – Choose the option “choose the available gold weight”.
Step no. 2 – Input the overall gold weight you possess in the form of grams and its purity in the form of karats.
Step no. 3 – Input the suitable interest rate and repayment tenure.
On finishing this procedure, the online loan calculator would show the overall funds you can get against your security, the monthly interest payable along with the principal amount and the overall interest constituent.
In the case you are content with the outcomes of the online gold loan calculator against such conditions, you can even place an application for receiving the same amount. For this, you just need to input your name, and contact details, attach the required documents, and hit on the apply now option on the screen.
What are the crucial parameters impacting the gold loan EMI?
Now as you are aware of the process for computing the EMI on gold loans using an online gold loan EMI calculator, it is crucial you get to know about the distinct parameters impacting the way the loan works.
Here are the top three constituents of the EMI computation formula that impact the final outcome –
Loan proceeds –
It shows the principal constituent or the overall fund proceeds you an individual borrower must borrow against the gold ornament. This amount is proportional directly to the amount of the EMI. Thus, your EMI on gold loans would enhance with the increase in principal loan proceeds.
Loan repayment tenure –
This shows the overall time for which you as a borrower avail the loan. The repayment tenure is basically inversely proportional to the loan EMI amount. A long tenure would reduce the loan EMI. In contrast, opting for the short term would lead to heftier loan EMIs.
Interest rate –
The rate of interest directly impacts your overall repayment proceeds and hence your loan EMI. A higher rate of interest tends to increase your overall interest cost and thus, enhance the monthly loan repayment amount.