Most Indians choose to put their money into gold because they know they can always count on it. You can easily get a gold loan against your gold jewellery instead of selling it. Using your idle gold jewellery is one of the easiest and fastest ways to get funds.
When you think about getting a gold loan, the interest rate is an important factor to consider. The interest rate has a direct effect on how affordable the loan is.
Since the gold jewellery is used as security, the interest rate on a gold loan is usually lower than the other types of loan. With Bajaj Finance, you can get a gold loan with interest rates starting from just 9.50% per annum.
Read on to learn more about the factors affecting the gold loan interest rates:
Loan amount
Due to the high value of gold on the market, it is easier to get a bigger loan against gold jewellery. Most lenders will give you up to 75% of the total value of the gold you pledge, which is in line with RBI rules.
Bajaj Finance offers gold loans starting from Rs. 5,000 and going all the way up to Rs. 2 crore against 18 karat gold jewellery.
Repayment frequency
The interest on your loan is also affected by the repayment tenure and frequency you choose. If you opt for a gold loan payback plan with more frequent payments, your interest rate can be lower. If you choose a plan with fewer payments, your interest rate could be higher.
Hence, when figuring out the interest rate on your gold loan, look at things like the loan amount and how often you pay it back. You can also use our online Gold Loan Calculator to determine your payable instalments to plan your financial journey better.
Market price of gold
The interest rates on gold loans are also affected by factors outside of the loan. There could be inflation, changes in the price of gold around the world, or a gap between demand and supply in the jewellery market. Lenders keep a close eye on these rates because they have a direct effect on the value of the gold. Most of the time, when the price of gold goes up, interest rates go down, making it easier for you to pay back a loan.
Income per month
Gold loans are usually easy to apply for and do not require much paperwork. However, some lenders may ask for proof of your monthly income when you apply. If you have a steady source of income, some lenders may offer you a lower interest rate on the loan amount you want because they believe you will be able to pay it back. But it is important to know that most reputable lenders, like Bajaj Finance, do not need proof of income for a gold loan. Your KYC papers are enough.
To apply for a Bajaj Finance Gold Loan, click here.
