How To Get The Lowest Gold Loan Interest Rate

Gold loans are less expensive than other types of loans. If you are looking for lowest gold loan then you are in the right place. Click here to know more.

22 Sep,2022 11:44 IST 32 Views
How To Get The Lowest Gold Loan Interest Rate

A gold loan can offer an easy way out to tide over financial difficulty. It is essentially a collateralized loan where a borrower mortgages some personal gold to borrow money from a bank or a non-banking finance company.

As gold loans are collateralized, they carry lower interest rates than non-collateralized personal loans. In addition, there are several ways in which a borrower can further lower the cost of borrowing while taking a gold loan. Here is a quick look at some of these options.

Compare loans being offered by various lenders:

The gold loan market consists of all sorts of lenders—banks, non-banking finance companies, specialized gold loan companies as well as local pawn shops and unorganized moneylenders. A borrower should look for the best interest rates being offered in their area.


Borrowers should scout the possibility of whether a lender is open to negotiating and offering a loan at a lower interest rate. Since it is a competitive market, this may be a distinct possibility.

Offer gold of high purity:

The interest charged on a gold loan is a function of the purity of the gold being offered as collateral. So, if a borrower can offer gold of high purity, they can get the best interest rate from the lender.

Offer some non-gold assets as collateral:

If a borrower can offer some non-gold collateral such as land, commercial or residential property, fixed deposits or any other asset of value, lenders can typically offer the loan at a lower interest. This is because the extra collateral gives them greater comfort in case of a default by the borrower.

Look for festival discounts:

Almost all lenders, big and small, offer festival discounts and offers on gold loans. These offers come especially around the main festivals like Dussehra, Diwali, Dhanteras, New Year, Sankranti, Pongal, Onam and Holi. Depending on the region where the borrower is based, the timing of these festivals could vary. So, borrowers should be keenly looking out for such discounts while availing a gold loan.

Choose flexible repayment plans:

Apart from these, borrowers should also look for flexible repayment plans being offered by lenders to lower their overall cost of borrowing. This can be done by paying off the principal amount first and then the interest portion, so that no further interest is levied on the principal paid.

Refinance a loan:

A borrower can refinance a loan if they think it is expensive or if they face cash flow issues. But they should first consider the foreclosure charges and the refinancing terms.


There are several ways in which a borrower can either get a gold loan at a lower cost or can bring down their total interest outgo by making some smart repayment choices

So, the next time you need to get a gold loan, do consider each of these options to get it as cheaply as possible.

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.

Most Read

Franking and Stamping: What’s the difference?
14 Aug,2017 03:45 IST
Like 2738 2738 Likes
How To Get A Personal Loan For A Low CIBIL Score?
21 Jun,2022 09:38 IST
Like 420 420 Likes
What is equitable mortgage home loan?
8 Mar,2019 05:15 IST
Like 3045 3045 Likes
What Is The Meaning Of E-Mandate For Mutual Funds?
23 Oct,2018 04:15 IST
Like 2004 2004 Likes

Get in Touch