Gold Loan interest rate is the cost charged by the lender on the amount borrowed against gold kept as security. It directly affects the total borrowing cost and your monthly repayment amount. Even a small change in the interest rate can make a big difference in how much you repay overall. At IIFL Finance, we offer attractive Gold Loan interest rates starting from 11.88% p.a.*, making borrowing affordable and flexible so you can meet your financial needs with confidence and ease.
Current Gold Loan Interest Rates (October 2025)
| Types of fee | Applicable Charges |
|---|---|
| Interest Rate | 0.99% onward p.m. (11.88% - 27% p.a.) Rates varies depending on scheme availed |
| Processing Fee[1] | As per Scheme Construct - upto 2% of loan amount |
| Penal Charges (w.e.f 01/04/2024) | 0.5% p.m (6% p.a) on outstanding due amount[2] |
| MTM Charges[3]* | ₹500.00 |
| Stamp Duty and other statutory charges | As per applicable laws of the state |
| Auction Charges*# | ₹1500.00 |
| Overdue Notice Charges*# (w.e.f 07/03/2024) (Once in 90 days) |
₹200 per Notice |
| SMS Charges* | ₹5.90 per Quarter |
| Part-Payment Charges | NIL |
| Pre-Closure Charges | NIL Minimum of 7 days interest will be charged if loan is closed within 7 days |
*Charges are inclusive of GST
# The combined levy of overdue notice charges and Auction charges will be capped at ₹ 1500 per customer loan account
[1] Processing fee is subject to the availed scheme and loan amount. The applicable rates are mentioned in the loan sanction letter at the time of disbursement.
[2] Outstanding due amount for this purpose includes the Principal outstanding and Interest accrued. Penal charges will not be levied on the outstanding penal due amount.
[3] MTM Charges shall be as defined in the T&C.
Additional Charges & Fees on Gold Loans
Apart from the Gold Loan interest rate, borrowers may incur additional charges for services provided by the lender. At IIFL Finance, we recognise the importance of keeping these costs minimal and transparent.
Our Gold Loan interest rates are attractive, and the associated charges are nominal. The processing fee varies based on the scheme chosen, starting from zero. Additionally, MTM (Mark-to-Market) charges are a flat ₹500.
IIFL Finance stands apart by offering some of the best Gold Loan interest rates alongside low additional costs. This customer-focused approach ensures our Gold Loan products are both affordable and accessible.
All fees are clearly listed on our website, allowing you to understand your payment obligations before applying. There are no hidden charges.
How Gold Loan Interest Rates are Calculated
The Gold Loan rate of interest is influenced by key factors such as the loan amount and loan tenure. Generally, a higher loan amount may attract a different interest rate, while a longer loan tenure often results in a lower monthly interest rate but increased total interest paid.
Gold Loan interest rates can be either fixed or floating. Fixed rates remain constant throughout the loan tenure, offering predictable repayments, whereas floating rates fluctuate with market conditions. Additionally, interest on Gold Loans is usually compounded monthly, affecting the overall repayment amount.
For example, consider a Gold Loan with an interest rate of 11.88% per annum, compounded monthly. If you borrow a principal amount for a tenure of 12 months, your Interest Payment can be calculated using the formula:
Interest Payable = Loan Amount×Interest Rate (p.a.)×Tenure (months)/12
Where,
- Loan Amount = Principal (amount of loan you take)
- Rate of Interest (p.a.) = Annual interest rate in %
- Tenure (months) = Number of months till repayment
Now,
Interest Payable = 50,000*11.88*12/12 = 5,940
Total Payable = 50,000+5,940 = 55,940
So, for a gold loan of ₹50,000 at an interest rate of 11.88% per annum, with a 12-month tenure, your monthly payable interest would be around ₹5,940. This helps you plan your monthly budget effectively and understand your repayment obligations clearly.
Factors Affecting Gold Loan Interest Rates
Gold loan interest rates play a pivotal role in determining the overall cost of borrowing and the affordability of the loan for the borrower. These rates are influenced by factors such as:
Gold Loan Interest Rate FAQs
Taking an interest-free gold loan may not be an option at IIFL Finance, you can opt for a gold loan at nominal rates
Yes, the Interest rates on your gold loan will vary according to the purity of your gold jewelry
IIFL Finance provides special schemes for farmers where the interest rates are lower so that they can avail gold loan to cater their capital requirements
EMI-based gold loan functions as any other loan, where the full amount is disbursed after the processing of application and the repayment is made in equated monthly installments as per gold loan scheme availed
Yes, you can only pay the interest on your gold loan and settle the principal amount at the end of the tenure
The interest rate for a ₹1 lakh gold loan with IIFL Finance can range between 11.88% and 27% per annum. However, the exact interest rate will depend on factors like the gold loan scheme that you have opted for, your eligibility, and the loan tenure. Plus, there may also be other charges like processing fees and mark-to-market (MTM) charges.
Apart from gold loans, IIFL Finance offers a wide range of financial products tailored to meet the needs of individuals, small businesses, and entrepreneurs. Three of their key offerings include Business Loans>, MSME loans and Secured Business Loans.
Gold prices influence gold loan interest rates by affecting the value of the collateral. When the gold price today is high, lenders consider it as lower risk, potentially offering reduced interest rates. Conversely, declining gold prices may prompt lenders to increase rates to mitigate the risk of collateral devaluation.
In a gold loan process, the borrower pledges their gold ornaments as collateral to the lender. The lender evaluates the gold, and depending on the purity and weight of the pledged gold, a loan amount is approved, and the amount is quickly disbursed. The borrower, in turn, has to repay the loan amount within a fixed tenure to reclaim their gold.
Benefits of Taking Gold Loan from IIFL Finance
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Competitive Gold Loan Interest Rate: Enjoy attractive interest rates starting from 11.88% per annum, helping you manage your borrowing cost efficiently.
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Quick and Easy Disbursals: Access your loan amount swiftly with a streamlined process designed for prompt disbursal.
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Flexible Repayment Options: Choose repayment plans that suit your needs with options for monthly, quarterly, or yearly interest payments.
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Minimal Documentation and No Income Proof Required: Apply effortlessly with minimal paperwork and without the need to provide income proof.
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Secure Gold Pledge: Your gold is safely stored and insured during the loan tenure for your peace of mind.
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Top-Up Loan Facility: Eligible customers can easily apply for additional top-up loans if the LTV is below 75%, with simple approval processes both online and offline.
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Easy Gold Release: Hassle-free return of your gold once the loan and interest are fully repaid.
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Trusted by Millions with Extensive Experience: Part of a trusted financial institution with 29+ years of industry experience, serving over 80 lakh customers* across 2000+ cities and 11,000+ pincodes.