Lenders typically penalize a loan amount that does not exceed 75% of the current market value of the gold pledged.
High accessibility of loan guarantees, interest rates generally lower than those of secured financing mechanisms such as personal loans, the possibility of quick and hassle-free disbursement of loans and less reliance on the credit rating. Borrower’s credit make gold loans one of the most popular loan products in our country. These loans, often taken against gold household ornaments, could not only help us achieve our financial goals, but also come to our rescue during financial emergencies.
Most banks and non-bank finance companies (NBFCs) offer gold loans with several repayment options. You will therefore be well advised to carefully compare your options to find the lender who offers the best repayment terms.
However, before applying for a gold loan, make sure that the value of your pledged gold would be sufficient to meet your financing needs. Note that the value of 24 karat gold began to slide shortly after peaking at over Rs 56,000 last August for 10 grams. Gold prices started to climb in April after hitting around Rs 44,000 (10 grams of 24 karat gold) in March. In addition, lenders typically sanction a loan amount not exceeding 75% of the current market value of the gold pledged, according to BankBazaar.
You will be well advised to take all of these factors into account when determining your loan amount and choosing a lender. Finally, make sure you have a full repayment plan to avoid penalties and possible loss of a valuable asset.
To help you make informed decisions, we have compiled a list of interest rates on gold loans currently offered by some of the major banks and NBFCs in our country. We have also provided indicative IMEs for gold loans of Rs 5 lakh taken for a term of 3 years by each of the lenders mentioned in the table below.
Note that we only took into account the lowest advertised gold loan interest rates for each of the lenders, we did not include processing fees or any other charges for the EMI calculation, and the applicable rates may be different depending on your loan amount, LTV ratio. , the term of the loan or any other condition of the chosen lender.
Indicative interest rates and IME for Rs 5 lakh gold loans with 3 year tenures
Disclaimer: The interest rates on gold loans for all public and private listed banks (ESBs) and some NBFCs have been taken into account for the compilation of the data. Banks for which data is not available on their website are not taken into account. Data collected on the respective websites on April 13, 2021. The lowest rate offered by banks / NBFC has been reflected in the table. The EMI is calculated on the basis of the interest rate mentioned in the table of loans of Rs 5 lakh with a term of 3 years (the processing fees and other charges are assumed to be zero for the calculation of the EMI) . * IRR for the January to March 2021 quarter. Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.
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