Gold Loan Rate & Interest Rates: Key Points to Understand
November 16, 2021
The interest rate applicable on any loan directly affects the repayment amount for that loan. When applying for a gold loan, various factors are considered by the lenders to determine the interest rate. Read further to understand these and other key points related to gold loan interest rates.
Most Indians prefer to invest in gold since they can count on it in times of financial crunch. Apart from selling it off for money, you can also avail gold loan against your gold ornaments. It is one of the quickest and convenient ways to arrange cash by utilizing your gold assets lying idle.
While repaying, you need to pay back the principal amount along with the gold loan interest levied on your loan. Different lenders may offer loans at different gold loan per gramrates, and also, it might be different for two borrowers borrowing from the same lender.
Let’s explore the key points that affect the gold loan interest rates:
Factors that Influence the Gold Loan Interest Rates
The lenders generally approve the loan amount, which is generally up to 75% of the worth of the security provided by you.
Though many lenders may not ask for income proof since the gold loan is backed up by security, others may ask for it to assess your repayment capacity. If your monthly income is good enough, your repayment capacity is also higher, helping you get the loan at lower gold loan rates.
Gold loan interest rates are also influenced by external factors. These can be inflation, movements in gold prices globally, or demand supply mismatch in the jewellery market.
3 Tips to Select Affordable Gold Loan Schemes
Compare Interest Rates
You should select a few well-known banks/lenders and compare the interest rates they are offering to select a suitable offer. You can also use the online gold loan interest rate calculator offered by many lenders.
Read Terms and Conditions Regarding Interest Rates
Sometimes the banks increase their interest rate every month due to default on monthly interest payment, the time elapsed, or other reasons. Due to this jumping interest, you may end up paying heavy interest. Hence you must read the terms and conditions properly to avoid such instances
Look at the Total Cost of Loan Instead of Just the Interest Rates
Don't just get lured by the attractive interest rate offered by the lender. Look at other terms such as the method of interest calculation and other charges involved. Use online calculators to know the total cost of the loan over the tenure instead of just looking at the interest rate.
Choose a Reliable Bank for Your Gold Loan
Always rely on a lender who offers attractive interest rates and flexible repayment options while ensuring safe custody of your jewellery. Also, stay informed about their terms and conditions in detail apart from comparing their interest rates to get the best deal.
ICICI Bank offers Gold Loan at attractive interest rates. To apply, you may give a missed call on 84448 84448 or visit the nearest ICICI Bank branch.