What you need to know
In a bullet loan you pay nothing during the tenure (usually up to 12 months) and repay everything at the end. Because interest is added at maturity, RBI requires LTV to be computed on the total repayable, so you can borrow slightly less per gram.
Cost example
| Loan | Repay at maturity (simple interest) |
|---|---|
| ₹2 lakh for 6 months @ 9% | Repay ₹2,09,000 |
| ₹2 lakh for 12 months @ 9% | Repay ₹2,18,000 |
| ₹2 lakh for 12 months @ 12% | Repay ₹2,24,000 |
Frequently asked questions
Is interest compounded on bullet loans?
Most lenders charge simple interest for the tenure; overdue amounts attract penal interest.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.