All you need to know about GST on gold loan interest

Everything you need to know about gold loan in India

Handling sudden expenses is never easy, but that is where loans step in. You probably know about personal loans, home loans, or education loans, but in India, gold loans are a big deal. After all, gold is not just jewellery here—it is tradition, luck, and an investment rolled into one. Families often buy gold for special occasions, and that same gold can come to your rescue when you need quick funds.

Gold loans are popular because they are simple to get and perfect for emergencies. But before you jump in, there is more to know than just pledging jewellery. Things like interest rates and GST on gold loan interest really matter. Let us break it down.

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% going up to 24% 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 to 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.
   

Got gold jewellery lying idle? Put it to work—check your gold loan eligibility and unlock its true value today.

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
• Enter your name and details and select the branch nearest to you
• Download the in-principal eligibility letter 

Once you have submitted your application, a representative from Bajaj Finance 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.

Apply in minutes. Money in account instantly with a Bajaj Finserv Gold Loan*