The gold loan interest rates that are availed by pledging gold, are lower as compared to other types of loans. The general range of gold loan interest rates is between 7.50% to 29.00% p.a. There are many banks and other financial institutions in India that offer gold loans, which range from Rs.1,500 to Rs. 1.5 crore. The tenure of repayment of interest rates along with the principal amount can be between 7 days to 240 months.
Let us discuss some methods to get the best rate of interest on a gold loan.
You should check if the gold price in the current market is, then the value of the gold ornaments or gold coins that are pledged by you shall also be high. In such cases, the lenders will offer you a low interest rate, it is because the risk associated is low and if, in any state, you are unable to repay the monthly instalments (EMIs), the lender can easily recover the amount by selling or auctioning the gold ornaments.
If the inflation rate is high, then the value of the currency also reduces and therefore, people can accumulate more gold. Against inflationary conditions, gold acts as a hedge, specifically when they persist for a longer duration. This results in the rise of gold prices and during such situations if you avail gold loan you can get a lower interest rate from the lender.
Some of the lenders offer gold loans to their existing customers, but some individuals who are not having any history with the bank can also get a gold loan. However, existing customers have a higher chance or are in a better position of getting a low interest rate on a gold loan.
Some of the listed banks where one can easily avail for a gold loan are HDFC Gold Loan, SBI Gold Loan, ICICI Gold Loan, Axis Bank Gold Loan and etcetera.
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