Know About the Details of Gold Loan Interest in India

 

A gold loan is offered against pledging gold ornaments as collateral with the lender. Since it is a secured credit, gold loan interest rates tend to be affordable, making it a suitable option to meet any immediate financial requirements.

To optimize one’s borrowing experience, he/she needs to opt for the lowest gold loan interest rate to reduce the cost of repayment.

Here’s a brief guide detailing the prevailing interest rate of gold loans offered by different financial institutions in India to help an individual make an informed decision.

Gold loan Interest rate in India of different financial institution

These are the following interest rates of a few selected financial institutions. Also, it is important to note that most financial institutions charge a processing fee along with an interest rate. It is wise to review the same before borrowing a gold loan.

●    ICICI – 10% to 19.76%, along with a transparent processing fee of 1% on a loan amount.

●       Axis Bank – 13% of interest rate, coupled with processing fee inclusive of GST.

●       SBI – 7% onwards, plus a nominal processing fee.

●       Bajaj Finserv - Starting from 12% p.a.

●       Bank of India – 7.40% p.a onwards, along with Rs.125 to Rs.300 per lakh.

●       Manappuram Finance – Maximum gold loan interest rate of 29%.

Factors affecting the gold loan interest rate in India

An individual needs to know a few factors that affect the interest r
ate in India before selecting any gold loan. These are as follows:

•   The higher the gold prices, the more one gets a competitive interest rate. It also allows a borrower to avail of high loan amounts as the rising prices lessen the lender’s risk.
• An existing cordial relationship with a lender often allows borrowers to negotiate for repayment tenor or interest rate.
• Inflation also lowers the gold loan interest rate because of the rising gold prices.
• An individual’s selection of tenor and loan amount also affects the interest rate. If the loan amount is higher, the applicable interest rate also increases. Additionally, in the case of low LTV, the financier charges a lower interest rate.

Thus, keeping all these in mind will help individuals identify the right gold loan interest rate to make their borrowing experience hassle-free.