Fixed vs. Jumping Gold Loan Interest Rate: Which One Should you Opt for

Fixed or jumping interest rate – which suits your gold loan?

Thinking of pledging your gold to meet a pressing expense? Before you go ahead, there is one important decision you should not overlook – choosing between a fixed interest rate and a jumping interest rate. This choice can directly impact how comfortable your repayment journey feels. Understanding how each option works will help you pick a gold loan that fits your financial habits and gives you peace of mind from the very start.

Jumping interest rate

A jumping interest rate, also called a floating or variable interest rate, can change during your loan tenure. It is usually linked to market benchmarks or external indicators such as policy rates. As these rates move up or down, the interest on your gold loan also changes. This means your interest outgo may vary over time. If market rates fall, you could benefit from lower instalments and overall savings. However, if rates rise, your repayments may increase, so you need to be comfortable with some uncertainty.

Fixed interest rate

With a fixed interest rate, what you see at the start is what you pay throughout the loan tenure. The rate remains unchanged, regardless of market movements. Your instalments stay the same, giving you complete clarity on your repayment amount. This option works well if you prefer stability and want to plan your monthly budget without worrying about rate fluctuations. It offers predictability and makes financial planning simpler.

Fixed vs. jumping interest rate – which one should you choose?

Your choice depends on how you manage risk and plan your finances. If you value certainty and want steady repayments, a fixed interest rate may suit you better. If you are comfortable with changing instalments and want the chance to benefit from falling rates, a jumping interest rate could work in your favour. Take a close look at your income stability, cash flow, and future plans before deciding. 

Note: Please note that Bajaj Finserv Gold Loan offers gold loans only at fixed interest rates.

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