All You Need To Know About Gold Loan Fees And Charges
Here’s everything you need to know about the gold loan fess & charges to make an informed decision about the best lender for your needs. Click here to know more.
Fees And Charges In The Gold Loan Process
While many financial institutions charge interest on loans, not all of them offer gold loans. To find out which banks or NBFCs are offering loans, try asking friends or family members if they’ve ever taken a loan against their valuables, visit your bank’s website, or perform a preliminary online search for information. Additionally, before deciding whether you want to take a short-term or long-term loan, ensure that both options offer fee schedules that work as per your budget.
Types Of Gold Loan Fees
Most financial institutions charge two types of fees:
- An up-front fee, also known as the processing fee, covers administrative costs and compensates for risk by providing some sort of insurance for the lender if your jewellery is lost or stolen.
- A monthly interest payment that allows them to profit from your jewellery. The interest rates range from 7 per cent to 29 per cent.
Processing, Stamp Duty, Cash Handling
All gold loan companies charge processing, stamp duty and cash handling fees, ranging from 0.8% to 2.5%. Gold loans are unsecured loans against a person’s physical possession of gold jewellery. A borrower can take a loan for up to 80% of its value.
This is typically calculated every month at 3% of your outstanding loan amount. The higher your loan amount, the higher is your monthly penal interest rate. This rate can vary from lender to lender.
A range of 6-8% is not uncommon for loans above Rs 50,000, with shorter terms (of three years or less) carrying a marginally lower rate. Some lenders charge more for short-term loans (12 months or less), with term rates as high as 10% being reported by some consumers.
Foreclosure And Auction Charges
If a borrower is unable to pay their gold loan amount, they can apply for a repayment extension. If they can’t pay back their existing loan by taking out another one, then GEM will sell some of their deposited items as per the terms of the gold loan.
All sales are made at market value, with no mark-up or extra commission added to the sale price. There may be commissions charged by auctioneers on behalf of GEM which varies as per the laws.
How Can You Avoid Excess Fees In The Gold Loan Process?
If you take a gold loan, it’s important to carefully examine your contract and make sure there are no hidden fees or penalties. Before signing the contract, read everything so that you understand every term of your agreement. If there is anything unclear, make sure to ask questions before signing on. Gold loans are a great way to get quick cash when you need it the most. However, ensure you understand all of your options and the terms and conditions first to find one that works for you.
Get The Maximum Value For Your Gold With IIFL
IIFL Finance is one of India's leading gold loan providers. For nearly three decades, we have assisted customers in obtaining gold loans. We provide loans with flexible repayment terms and competitive interest rates. Furthermore, you can now secure your gold loan online, right from home.
When you get a gold loan from IIFL, your collateralized physical gold is kept safe until the loan amount is paid completely. Your gold can then be redeemed and returned at no additional cost. Contact our 24-hour customer service team via phone or live chat if you have any questions about how to get a loan against your jewellery.
It's never been easier to get started—just fill out our form. we’ll get back to you within 24 hours. Take advantage of our fast and easy process to borrow money against your gold jewellery at the lowest interest rate.
Q1. Is A Processing Fee Involved To Avail Of A Gold Loan?
Ans. Yes, there is a nominal processing fee involved in the gold loan process.
Q2. Can I Close My Loan Account Before Its Tenor?
Ans. Yes, you can finish the gold loan payment before the tenor and get your gold back from the branch.
Q3. What Are Closure Charges?
Ans. They are the charges levied if you repay the loan within 3 months from acquiring the loan. It is a nominal fee ranging from Rs. 0-150.
Q4. What If I Choose To Continue My Loan After A Year?
Ans. After the tenor is complete, you can renew your loan after a year.