What Is The Interest for Rs 1 Lakh Gold Loan?
Understand the various interest rates associated with taking a gold loan. Learn how gold loan providers determine interest rates for 1 Lakh Gold Loan here!

Gold loans are convenient financial tools to help individuals in their times of distress. While personal loans are unsecured loans sanctioned on the basis of income and repayment ability of an individual, gold loans are sanctioned by accepting gold ornaments as security.
Gold loans are short-term loans that carry lower rates of interest than personal loans or credit card loans. The amount of money an individual can borrow against a gold item varies from lender to lender. While some lenders offer gold loans starting from Rs 10,000, there are a few who are ready to sanction loan amounts as less as Rs 1,500. Typically, up to 75% of the gold’s value is offered by banks and NBFCs as loans.
The value of the pledged gold is estimated as per the market rate of gold on the day of the loan application since the price of the yellow metal changes daily. The loan amount approved by lenders depend on the purity and weight of the gold. But the weight of the gold does not influence the rate of interest.
Instead, the interest charged on a gold loan depends on many other factors which are mentioned below:
• Market Price Of The Gold:
When the market price of gold is high, lenders offer a lower interest rate. This is because in such circumstances, the value of the pledged jewellery is high. Also, since the lender sanctions only up to 75% of the value of the gold as loan, it has the comfort of recovering the debt even if gold prices fall. As the risk involved is less, lenders offer lower interest rates on loans.• Inflation:
Gold ornaments, etc. act as a hedge during inflation. During times of rising inflation people hoard gold because of the high gold price in the market. Opting for a gold loan during these times is ideal as most lenders offer loans at lower interest rate• Existing Relationship With The Lender:
Many banks and NBFCs offer gold loans to their existing customers as they are already aware of their repayment history and creditworthiness. A good relationship with a lender can help secure lower interest rates and greater flexibility in repayment terms.Get Gold Loan at the comfort of your home
Apply NowIn addition, the loan amount and tenure are two other factors that determine the interest rate. The interest rate is higher if the loan amount is bigger and tenure is longer.
The interest rate on gold loans is to some extent influenced by the purity of the gold ornaments one pledges. It is worth bearing in mind that for a gold loan all the gold ornaments should match the financial institute requirement. The purity is verified by the jewellery appraiser in the bank or the NBFC. The weight of precious stones and gems embedded in the gold ornaments is not considered and is excluded from the calculation.
What Is The Interest For Rs 1 Lakh Gold Loan TO Be Paid?
Currently, most lenders offer gold loans with interest rates starting around 10% and going up to 30% per year. Most lenders provide an online interest or Gold EMI calculator to help borrowers figure out the interest they would have to pay. Let’s understand this with the help of an example where a borrower needs a loan of about Rs 1 lakh.
At current prices of gold, the borrower would have to provide about 27.18 grams of gold jewellery to the lender as collateral to take out a loan of Rs 1 lakh. Assuming the interest rate at 10% per annum and the tenure of one year, the total interest to be paid would be Rs 5,499 and the EMI would be Rs 8,791.
If the rate of interest is kept at 10% but the tenure is changed to two years, the interest amount would increase to Rs 10,747 while the EMI would fall to Rs 4,614. Conversely, if the tenure is kept at one year and the interest rate is increased to 15%, the total interest payout would be Rs 8,309 and the EMI would be Rs 9,025.
Conclusion
To avail a gold loan, the borrower must give gold jewellery to the lender against which the loan amount is provided. The minimum repayment tenure in a gold loan is three months and it can go up to a maximum of five years depending on the loan scheme available.
Anyone who is 18 years of age and has gold ornaments along with supportive documents to prove the ownership of the gold can apply for a gold loan. The lowest gold loan interest rates are relatively lower than other types of loans. But it is good to have a prior idea of the gold loan interest rates before finalizing the loan.
Most importantly, you should take out a gold loan only from reputed lenders such as IIFL Finance, one of India’s top NBFCs. IIFL Finance offers gold loans with a minimum loan. The maximum repayment tenure of IIFL gold loans is up to two years. To calculate the EMI, you can use the gold loan interest rate calculator online and get the exact figures in a few minutes.
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Apply NowDisclaimer: 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.