Everything you need to know about gold loan in India
Taking a loan is a common way to handle financial emergencies. There are different types of loans available, such as personal loans, home loans, education loans, and even gold loans, which are popular in countries like India where gold is a big investment market.
In India, people often buy gold for special occasions to bring luck and prosperity to their homes. Some also buy gold as an investment. Because of this, gold loans have become popular because they are easily accessible and can be used in emergencies.
While you may be familiar with the basic requirements for getting a loan backed by gold, there are other important things to consider it is a good investment. Keep reading to learn about interest rates, GST on gold loan interest, and other important aspects.
Gold loan interest rate
The gold loan interest rate represents the cost of borrowing against your gold jewellery. With Bajaj Finance, you can avail of a gold loan at interest rates starting at 9.50% per annum, ensuring a cost-effective and flexible solution to meet your financial needs.
A gold loan can be a valuable financial tool in times of need. However, it is essential to consider certain factors that can impact your borrowing experience.
- Market conditions: Fluctuations in market demand can impact interest rates as well as the value of the gold loan per gram.
- Gold rates: The market rate of gold also affects the interest rates on gold loans, as they directly impact the value of the gold jewellery offered as collateral.
- Repayment frequency: The frequency of the interest payments on your gold loan also impacts the interest rate.
If you are considering a gold loan from Bajaj Finance, there are online tools to assist you throughout the application process. One of these is the free online Gold Loan Calculator.
You can use the calculator to determine the loan amount you can avail of and calculate the interest that will be applicable. Simply input the necessary information, such as the weight of the gold you intend to pledge or the desired loan amount, and the calculator will provide you with accurate and relevant details. It is a quick and easy way to access the information you need to make informed decisions about your gold loan.
How GST affects gold loan interest and charges
The goods and services tax (GST) is an indirect tax applied to goods and services across India, including certain gold loan charges. While GST does not apply to the gold loan interest itself, it is included in the processing fee. This means when you see the processing fee, it already reflects the total cost with GST—there is no need to pay it separately. This transparent approach helps borrowers understand the complete cost of their gold loan upfront.
If you are planning to apply, Bajaj Finserv Gold Loan offers a convenient process with minimal requirements.
Key points to remember:
GST is charged only on the gold loan processing fee, not on the gold loan interest.
The processing fee shown already includes GST for better transparency.
Indian citizens aged 21–70 years are eligible for Bajaj Finserv Gold Loan.
Only one KYC document is required (Aadhaar card, voter ID, passport, driving licence, NREGA job card, or national population registration letter).
For any questions about charges or documents, Bajaj Finance is ready to assist you.
How to calculate GST on your gold loan
Calculating GST on your gold loan is simple once you understand where it applies. While GST does not apply to the gold loan interest, it is levied on the processing fees and some service charges. The current GST rate on such services is 18%. By knowing the processing fee amount, you can easily estimate the GST using a basic formula or online GST calculator. This helps you understand the total cost of borrowing and plan your repayment effectively.
Steps to calculate GST on your gold loan:
Check your processing fee:
Find out the processing fee charged on your gold loan. For example, if the processing fee is ₹1,000, note this amount.Apply the GST rate:
Multiply the processing fee by 18% (0.18).
Example: ₹1,000 × 0.18 = ₹180 GST.Calculate the total cost:
Add the GST to your processing fee to get the final amount.
Example: ₹1,000 + ₹180 = ₹1,180 total processing cost.
Understanding GST on your gold loan ensures transparency and helps you avoid surprises when managing your loan costs.
How to apply for a gold loan
There are two convenient ways to apply. You can either visit a nearby Bajaj Finance branch or apply online through their website by following a few simple steps. Here is how:
Click on ‘APPLY’ to open our online application form
Enter your 10-digit mobile number and click on ‘GET OTP’
Submit the OTP to verify your identity
Select your state and city to find the branch nearest to you
Enter your full name and date of birth as per your PAN
Set up your appointment at our branch
Once you have submitted your application, a representative from Bajaj Finserv will reach out to guide you through the next steps. With more than 800 branches located throughout India, Bajaj Finance ensures a quick and convenient loan processing experience.