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Cheapest Gold Loan Interest Rates And Lowest EMI From Top Banks

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The situation in India is deteriorating. In the aftermath of the Covid Crisis, households and small businesses in gold's second-largest consumer nation are borrowing against their jewellery, coins, and other gold items in unprecedented amounts. As opposed to unsecured personal loans, pledging gold as collateral lowers borrowing costs significantly, allowing poorer households to access the credit they would not otherwise be able to obtain. For Indians, a gold loan is not a novel concept. From the beginning of finance, it has been the primary source of lending and raising funds. Its origins can be traced back many centuries when it was the primary means of barter and trade. And India was, and continues to be, the world's largest consumer of gold ornaments, with Kerala and Tamil Nadu topping the list of Indian states. Gold has a special place in India's socio-economic culture. It is regarded as a valuable asset, a hedge against inflation, and an immediate source of cash, especially for Indian rural households. Gold is used as a kind of leverage to obtain funds for immediate needs.

 

Gold Loan Eligibility and EMI

Gold Loan Eligibility and EMI

Gold loan eligibility is determined by the loan per gramme of gold or the loan amount, which is determined by the value of gold pledged (based on gold price), purity of gold, and the LTV applied by banks. The price of gold is calculated using the average price of 22 carat gold over the previous 30 days and the loan-to-value provided by your bank. Your Gold Loan EMI is determined by your loan amount eligibility, interest rate provided, and loan tenure.

By subtracting the principal amount from the total amount due, you can calculate the gold loan interest. An EMI calculator can be used to measure the total amount you'll pay at the end of the term.

Gold Loan- Bullet Repayment Scheme
 

Gold Loan- Bullet Repayment Scheme

You must repay the entire principal and interest balance at the end of the loan period if you use the Bullet Repayment form. Yes, you read that correctly. During the loan term, there is no need to pay principal or interest! After your loan is completed, simply pay the entire amount.

Allows you to select a flexible repayment schedule in which you pay interest on the loan as monthly EMIs and the principal payment in one lump sum at the end of the loan term. Some banks often allow you to pay a portion of your principal as part of your monthly payments. Suitable for gold loans with a term of less than six months. You won't have to worry about repaying the principal every month.

Lowest Gold Loan Interest Rates and EMI from Top Banks

Lowest Gold Loan Interest Rates and EMI from Top Banks

Lowest Gold Loan Interest Rates and EMI from Top Banks

Bank Interest Rate Lowest EMI Per Lakh Max Tenure Eligible Loan Amount
SBI Gold Loan 7.50% Rs. 3,111 36 months Rs. 50 Lakh
HDFC Bank Gold Loan 9.50% Rs. 4,591 24 months Rs. 50 Lakh
ICICI BANK 9.00% Rs. 8,745 12 months Rs. 10 Lakh
Federal Bank 8.50% Rs. 8,722 12 months Rs. 75 Lakh
PNB 8.75% Rs. 8,734 12 months Rs. 10 Lakh
Canara Bank 7.65% Rs. 8,683 12 months Rs. 20 Lakh

Gold Loan: Things to know

Gold Loan: Things to know

State Bank of India, Bandhan Bank, and Muthoot Finance all have a three-year maximum term. A loan from Kotak Mahindra Bank will last up to four years. Some lenders charge a percentage of the loan amount as a processing fee. For example, Punjab National Bank charges 0.75 percent, or Rs 750, on a Rs 1 lakh loan.

The interest rate charged by the bank is proportional to the loan amount. As a result, if you need a large loan, be prepared to pay a higher interest rate.

The maximum gold loan sum is determined by the quantity and nature of the gold papers. A bank-appointed appraiser inspects the gold articles for consistency and quantity.

The MCLR (Marginal Cost of Fund Based Lending Rate) or RRLLR influences the interest rate offered to applicants (Repo Rate Linked Lending Rate). Banks that issue gold loans against the RRLLR are much quicker in notifying applicants of RBI Repo Rate cuts.

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