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How To Get The Best Interest Rate On Your Gold Loan?

There are various factors which influence gold loan interest rates. Know the key factors & the tips to help you avail the best interest rates on gold loan!

10 Jul,2022 05:48 IST 175
How To Get The Best Interest Rate On Your Gold Loan?

When you seek a gold loan, one important factor to consider is the best gold loan rate or the right gold loan interest rate. Gold jewellery works as collateral against gold loans. Therefore, such loans are preferred due to a lower interest rate compared to other types of loans. However, the loan interest rates vary among lenders. Besides this, there are a few other important factors that alter the rate of interest on gold loans.

There are a few lenders who may offer a low or high interest rate as per the value of your collateral on offer. Others might calculate the interest rate as per your loan tenure and loan amount. Therefore, to make an informed choice of the best gold loan rate on your gold loan, you must know the factors that affect it.

Factors Influencing Gold Loan Interest Rates

1. Economic Parameters

Another vital factor influencing the interest rate on gold loans is the general economic condition of the nation. In the case of inflation or poor employability levels in the market, the loan interest rates for gold loans will see a sharp rise.

2. Loan Amount

The loan amount you desire will directly dictate the interest rate. However, irrespective of the gold loan amount being too high or low, the interest rates will fluctuate on the higher end of the scale.

3. Income Source

An important factor that affects the rate of interest on a gold loan is your source of stable income. Lenders need borrowers to pay the loan back over a fixed period. There are provisions for tenure extension or pre-payments. By reviewing your income levels, lenders can determine your possible payment capacity, which affects the prescribed interest rate on your gold loan.

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How To Get The Best Interest Rate On Your Gold Loan?

1. Performing Extensive Research

Conduct in-depth research on the general gold loan interest rate in your area. Consider pointers such as:

• The prevalent interest rate in annual percentage
• The interest rates on non-gold loans for a comparative analysis
• The add-on charges such as processing fees and/or miscellaneous charges.
• The one that offers quick loan processing time.

2. Appraise The Gold Loan Right

To ensure the successful sanctioning of your gold loan, you need to get an appraisal of the weight of your collateralized jewellery. Always pick a reputed lender for a transparent appraisal process. Appraisal refers to a written statement mentioning the purity, weight and value of your gold jewellery.

3. Know Your Maximum Loan Limit

As is the norm among lenders, you get a certain percentage of the loan amount approved as per the appraised gold jewellery value. The Reserve Bank of India has set a cap upto 75 per cent in this context. Find out the maximum eligible Loan to Value for your gold at your preferred financial institution.

IIFL Finance Offers The Best Gold Loan Rate

IIFL Finance has many schemes on gold loan with interest rates starting as low as 0.99% p.m. Walk into any of the IIFL branches across India, complete your e-KYC and be eligible to get a gold loan disbursed in as low as 30 minutes.


Q1. What is the lowest gold loan interest rate?
Ans. The gold loan rates range from 7% to 29% per annum. IIFL Finance offers interest rates at 0.99% per month onwards. 

Q2. What factors affect gold loan rates?
Ans. The main factors affecting loan rates are the gold purity, tenure of borrowing, and loan amount.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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