Gold Loan Interest Rate

In India, gold has long held a position of cultural and financial significance, serving as a cherished asset passed down through generations. Gold loans have emerged as a popular financial tool, allowing individuals to leverage their gold holdings to meet their immediate financial needs. The gold loan interest rate plays a pivotal role in determining the overall cost of borrowing and the affordability of the loan for the borrower.

Gold loan interest rates is a critical factors of the gold loan industry, influencing the overall cost of borrowing and the affordability of the loan for the borrower. These rates vary among lenders and are determined by a combination of factors, including the borrower's creditworthiness, the loan amount, the loan tenure, and the current market conditions. And you should understand how gold loan calculation work, as they affect the total amount you have to repay.

At IIFL Finance, we don't just offer some of the lowest gold loan interest rate; we offer a gateway to your dreams, that make borrowing accessible and flexible. We understand that the loan amount you seek is crucial, and our schemes are meticulously tailored to ensure that your capital requirements are effectively met. You can bid farewell to hidden costs and surprises as we lay it all out on the table, offering utmost transparency by communicating all jewel loan interest rates and charges.

Gold Loan Interest Rate And Applicable Charges

Interest Rate 0.99% onward p.m.
(11.88% - 27% p.a.)
Rates vary as per loan amount and repayment frequency
Processing Fee ₹0 onwards
Varies depending on gold loan scheme availed
MTM Charges ₹500.00
Valuing an asset to reflect its current market rate
Auction Charges ₹1500.00
Auction Intimation Charges: ₹200
SMS Charges ₹5.00
SMS Charges Per Quarter (Payable On Closure Of Loan)

Apart from the gold loan rate of interest that the borrowers have to pay, gold loans come with some additional charges. These charges are levied on the borrowers because of the additional services rendered by the lending company, such as IIFL. However, IIFL Finance understands that such charges are to be borne by the customer and hence, has designed the gold loan product to carry a few additional charges.

With an attractive and affordable gold loan rate of interest, IIFL Finance’s additional charges are nominal. The processing fee varies depending on the availed gold loan scheme starting from Rs 0 onwards. Furthermore, the MTM charges on IIFL’s gold loan are the lowest in the industry at a flat Rs 500.

These additional charges are listed with utmost clarity on IIFL Finance’s website to let you analyse their payment obligations before taking a gold loan. Additionally, there are no hidden costs attached.IIFL Finance stands out by offering not just the most competitive gold loan interest rates in the market but also keeping these additional charges remarkably low compared to industry standards. This customer-centric approach ensures that IIFL Finance's gold loan offerings remain highly attractive and accessible to borrowers seeking financial assistance.

Apply now

Factors Affecting Gold Loan Interest Rate

To understand the nuances of gold loan rate today in India, one must first grasp the basic concept of gold loans. Gold loans are secured loans where you offer your gold jewellery as collateral to a financial institution in exchange for money. These loans are popular for their simplicity, fast approval, and relatively lower interest rates compared to unsecured loans.

Loan Amount

The loan amount plays a critical role in determining the best gold loan interest rate.

Monthly Income

Although gold loan borrowers don’t face many difficulties in getting a gold loan approved from the lender, they may require knowledge of your monthly income during the loan application process. The monthly income amount defines the repayment capacity of the borrower.


Lenders follow two types of benchmarking methods to determine the gold loan interest rate: Repo rate-linked lending rate, and MCLR-linked lending rate. The gold loan interest rate today varies from one lender to another, depending on the chosen benchmarking method. Generally, MCLR-linked lending rates result in a gold loan lowest interest rate offered by lenders.

Credit Score

Although gold loans do not factor in the credit score of the borrower for eligibility criteria, the credit score can still affect the interest rate on the gold loan for a borrower. If the borrower has defaulted multiple times on interest payments before and has a bad credit score, it is a possibility that the lender will offer the gold loan at a higher interest rate.

Gold Value

One of the most important factors that influence the loan against the gold interest rate is the value of the pledged gold. Every borrower has to pledge gold articles to the lender, and they offer a percentage of the total value of the gold articles as the loan amount.

Repayment Frequency

The interest repayment of gold loan frequency on your loan amount also alters rate of interest.

Things To know Before Applying For Gold Loan

To understand the nuances of gold loan rate of interest in India, one must first grasp the basic concept of gold loans. Gold loans are secured loans where you offer your gold jewellery as collateral to a financial institution in exchange for money. These loans are popular for their simplicity, fast approval, and relatively lower jewel loan interest rates compared to unsecured loans.

Here are some critical factors to consider while applying for a Gold Loan

  1. Loan-to-Value (LTV) Ratio: The loan amount you can obtain depends on the value of your gold. A circular issued by the RBI relaxed the lending norms for gold loan ltv ratio maximum capped at 75% of the value of gold given will be given as loan

  2. Interest Rates: Gold loan rates vary among lenders and depend on multiple factors like gold purity, tenure and scheme that you availed

  3. Loan Tenure: Gold loans usually have short tenures, ranging from a few months to a few years. At IIFL Finance the gold loan maximum tenure is 24 months

  4. Repayment Options: Understand the repayment options offered by the lender, which may include regular EMIs or the option to pay the interest regularly and principal at the end.

  5. Processing Fees and Other Charges: Be aware of any additional fees or charges associated with the loan.

Calculation of Gold Loan Interest Rate

Two main factors affect the calculation of the gold loan rate of interest:

  1. Loan Amount : The gold loan amount you want to borrow is the primary factor in calculating the rate of interest of the gold loan. The higher the loan amount, the higher the overall interest rate.

  2. Loan Tenure : The loan tenure specifies the period of your monthly loan repayment obligations. The higher the loan tenure, the lower the interest rate.

Customers can visit the IIFL website to use gold loan calculator by putting in a few details, such as the desired loan amount, value of gold articles and the loan tenure. If you know the quantitative value of such factors, you can use a loan calculator to calculate the gold loan amount

Always remember that the gold loan interest rate depends on the specific loan scheme chosen and its tenure. This knowledge of gold loan interest rates is paramount as it directly impacts the overall borrowing cost of the loan. Consequently, securing a gold loan with a low-interest rate can significantly reduce repayment costs and alleviate financial strain.

Apply for Gold Loan At IIFL Finance

Find Your Nearest Branch - IIFL Finance

Walk into any IIFL Gold Loan branch with your gold.

Find Nearest Branch
Documents Required Icon - IIFL Finance

Provide your ID proof, address proof and gold to get an instant approval

Documents Required
Simple Process Calculator - IIFL Finance

Simple process and in-house gold valuation ensures that you get the loan amount in your account or in cash

How Is The Interest Calculated On Gold Loan

how interest calculated on gold loan

To Know Gold Loan Rate Calculation, check this video to get detailed information about important factors of interest rate today followed by loan lending companies in India

Gold Loan Interest Rate FAQs

Although taking an interest-free gold loan may be possible, the situation is very rare. At IIFL Finance, you can take a gold loan at a nominal interest rate with no hidden charges.

Was this helpful?

Yes, interest rates vary based on the kind of gold jewellery you have. The loan against gold interest rate also depends on the purity of the gold jewel.

Was this helpful?

Yes, farmers may get a discount on loan interest rates. However, the product differs and is called an agriculture gold loan.

Was this helpful?

Gold loan interest rates are the charges you pay to borrow money against your gold jewellery as collateral. These rates vary among lenders and are determined by factors such as the loan amount, loan tenure, borrower's creditworthiness, and the current market conditions.

Was this helpful?

EMI-based gold loan functions as any other loan, where the full amount is disbursed after the processing of application and the repayment is made in equated monthly installments as per gold loan scheme availed

Was this helpful?

The gold loan interest rate charges depends on gold loan scheme and tenure availed

Was this helpful?

Yes, you can pay only the interest on a regular basis and settle the principal amount at the end of the gold loan tenure.

Was this helpful?

The maximum gold loans tenure is 24 months

Was this helpful?
Show More Show Less

Other Loans

IIFL Gold Loan Interest Rate Insights

Gold As An Investment: Your Guide
Gold Loan Gold As An Investment: Your Guide

Investment is essential to build wealth and secur…

Know The Maximum Gold Loan Tenure & Eligibility
Gold Loan Know The Maximum Gold Loan Tenure & Eligibility

IIFL Finance Gold Loan is a short-term, secured l…

How To Check Gold At Home
Gold Loan How To Check Gold At Home

The precious metal Gold is prized for its beauty,…

How To Buy Gold ETF
Gold Loan How To Buy Gold ETF

At the heart of India's rich cultural heritage, g…