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 51 views
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.

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

1. Performing Extensive Research

Conduct in-depth research on the general interest rates on gold loans 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 at 90 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 loans with interest rates starting as low as 0.83% p.m. Walk into any of the 1900 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 9 per cent per year. IIFL Finance offers interest rates at 0.83% per month, making it the lowest available interest rate.

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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