Gold Loan Interest Calculation: 4 Things You Did Not Know

Key factors to know about gold loan interest calculation

Are you considering a gold loan to meet your financial needs? Gold loans are an excellent way to leverage the value of your gold jewellery without having to sell them. However, understanding gold loan interest calculation is crucial before you embark on this financial journey.

Here are the 4 things you need to know about calculating gold loan interest rate:

1. Type of interest rate – Gold loans may carry fixed or reducing balance interest rates. Knowing which one applies will impact your total repayment.
2. Loan amount and tenure – Higher loan amounts and longer tenures can affect the overall interest payable.
3. Loan-to-value (LTV) ratio – This determines how much loan you get against the gold's value, indirectly impacting the interest charged.
4. Repayment frequency – Monthly, quarterly, or end-of-term repayments also play a role in how your interest accumulates.

Being informed about these factors helps you plan your repayments wisely.

The gold loan amount

When applying for a gold loan, the loan amount plays a significant role in determining the interest you will pay. The loan amount is determined by evaluating the value of your gold assets. The higher the value of your gold, the higher the loan amount you can expect. It is essential to keep in mind that leading financial institutions provide an LTV of up to 75% of the gold's value as the loan amount.

The gold loan interest rate

Gold loans generally come with two types of interest rates—fixed and floating. A fixed interest rate offers predictability, as the rate remains constant throughout the loan tenure, making it easier to plan your monthly repayments. On the other hand, a floating interest rate changes with market conditions, which may lead to fluctuating instalments. While fixed rates offer stability, floating rates might be beneficial during periods of declining interest. It is essential to evaluate your financial situation and risk appetite before choosing. Learn more about the gold loan interest rate to make an informed borrowing decision. 

Planning to use your gold for quick funds? Check your gold loan eligibility now and see how much you can borrow instantly.

The gold loan tenure

The gold loan tenure is another crucial factor in gold loan interest calculation. It refers to the duration for which you borrow the funds. Generally, gold loans have shorter tenures compared to other types of loans. The tenure can range from a 1 day to 12 months, depending on the lender and your repayment capacity. It is important to consider your financial goals and ability to repay when selecting the loan tenure, as it can influence the overall interest payable.

Gold loan calculator

To simplify the process of estimating the interest and overall repayment amount, most financial institutions provide online gold loan calculators. These calculators consider factors such as the gold loan per gram rate, loan tenure, and repayment schedule to provide you with the interest payable on your loan. By utilising a gold loan calculator, you can plan your finances effectively, ensuring that the loan is affordable and fits within your budget.

How to apply for a gold loan from Bajaj Finance?

You can easily avail of a gold loan from Bajaj Finance if you are an Indian citizen between the ages of 21 and 70 years. You just need have any one of your KYC documents for gold loan (Aadhaar Card, voter ID card, driving licence, or passport) ready to get of a gold loan.

Follow a few easy steps to get a quick gold loan from Bajaj Finance:

Step 1: Navigate to the Bajaj Finserv Gold Loan page.

Step 2: Select and open the online application form.

Step 3: Fill in the first and last name as it appears on PAN card.

Step 4: Enter the 10-digit mobile number and select the city.

Step 5: Enter the OTP sent to the registered mobile number and submit the application.

Step 6: Set up an appointment at the nearest gold loan branch, from the options displayed, and bring the gold jewellery there in person for evaluation. 

Ready to unlock the value of your gold? Apply for Bajaj Finserv Gold Loan today.