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Applying for a gold loan is a smart way to leverage your idle gold assets. This instrument is fast catching up with personal loans and other such credit instruments due to its easy accessibility and comparatively easier eligibility criteria. You also get lower interest rates on gold loans, making your borrowing experience less stressful.
Interest Rate on Gold Loan
When you apply for a gold loan, you are using your gold jewellery, coins or bullion as collateral to borrow money from a reputable lender. In return, you will have to pay an interest rate on the loan amount.
The interest rate depends on several factors, including the purity and weight of the gold, the amount you want to borrow and the lender's specific policies. As of 2024, gold loan interest rates in India are very competitive, making it a great option for those who want quick access to funds.
How are interest rates on gold loans determined?
Several factors can affect the interest rate you will be offered when you apply for a gold loan:
• Amount of loan
If you need a larger loan amount, chances are you will get some benefit on the interest rate. Lenders usually offer better rates on larger amounts, as this reduces their administrative costs for each unit of loan they approve.
• Purity of gold
It is quite straightforward, purity directly impacts interest rates. Higher purity of gold generally attracts lower interest rates, as it has a higher resale value and offers better security to the lender.
• Lender's policies
These policies may vary from lender to lender. Some banks and financial institutions may also offer promotional rates or discounts to existing bank customers.
• loan term
Shorter terms generally have lower interest rates than longer terms. This is because shorter terms reduce the risk of market fluctuations affecting the value of gold over time.
• market conditions
Geopolitical and economic factors also affect interest rates to a great extent. For example, uncertain and stressful situations usually increase the cost of borrowing, which also affects the rate of gold loan.
What is a Gold Loan Calculator?
If you are planning to take a gold loan, you should know about the gold loan calculator and how it works. This tool can help you calculate your monthly payment. It is an effective way to manage finances smartly.
How to use the Gold Loan Calculator
Phase 1: Open your preferred web browser and visit the Bajaj Finserv Gold Loan page
Phase 2: Find the “EMI Calculator” tab on the top navigation bar and click on it.
step 3: In the Gold Loan Calculator interface, you need to enter the following details.
Gold Weight / Loan Amount: Enter the weight of gold in grams or enter the desired loan amount you wish to borrow from Bajaj Finance.
Repayment options: Choose the repayment option that suits your financial needs. It can be monthly, fortnightly, quarterly, half-yearly or yearly.
step 4: After entering the required details the Gold Loan Calculator will process the information and provide you the total loan amount you can get along with the interest payable.
The calculator will display the loan amount, weight of gold and interest rate payable. If you are satisfied with the results, you can modify the loan parameters and see how it affects your total interest for the repayment options you choose. This flexibility will enable you to find the most suitable loan structure to meet your financial needs.
How to get the best gold loan interest rates
, Always do thorough research and evaluate the loan rates offered by different lenders.
, Don't hesitate to bargain with the lender for better rates, especially if you have a good credit history or are a repeat customer.
, If possible, choose a shorter tenure, which may increase your EMI, helping you save interest costs in the long run.
, Always check for hidden and additional charges. This includes processing fees, valuation charges and prepayment penalty, if any. This cost may seem small, but it can add up in the end.
Now that you know about gold loans, interest rates on gold loans and how to use the gold loan EMI calculator, the next step is to choose the right lender.
There are many options available in the market, which may confuse you. Among the various options available, Bajaj Finserv Gold Loan is a reliable option, offering both competitive interest rates and flexible repayment tenure. Get easy access to liquidity with a loan of ₹2 crore when you need it the most!
