When opting for a gold loan, apart from interest rates, borrowers encounter various fees and charges. These charges include processing fees, valuation fees for the gold, and foreclosure charges.
Here’s a list of fees and charges for our gold loan:
| Types of fee | Applicable charges |
| Interest rate | 9.50% to 26% per annum |
| Processing fees | 0.15% of the loan amount (inclusive of applicable taxes).Subject to a minimum Rs. 99 (inclusive of applicable taxes) and maximum of Rs. 600 (inclusive of applicable taxes). |
| Stamp duty (as per respective state) | Payable as per state laws and deducted upfront from loan amount |
| Cash handling charges | %$$Rs. 50 (inclusive of applicable taxes) applicable for cash disbursement only. |
| Penal charge | Rs. 8 per day on Outstanding Balance - Penal charge will be over and above the interest rate slab mentioned above which shall be applicable/chargeable in case of default in repayment of the Outstanding Dues post maturity. |
| Cash deposit charges | Customers will incur a cash deposition charge of Rs. 50 (Inclusive of Applicable taxes) when making cash payments at our branch offices |
| PG facility charges | Rs. 11 (Inclusive of Applicable taxes) will be charged for utilizing the payment gateway to make part or full payments towards the loan through digital properties |
| Convenience fee | Convenience fee of Rs. 149 (inclusive of applicable taxes) shall be levied for release of ornament/s out of multiple ornaments securing the Gold Loan. |
| Part-prepayment charges | NIL |
| Foreclosure charges | Minimum 7 days interestScenario – Foreclosure charges are “0”, but in case the customer closes the loan within 7 days of booking, minimum 7 days interest is charged. |
| Auction charges | Charge for physical notice – Rs. 40 (inclusive of applicable taxes) per noticeRecovery charges – Rs. 500 (inclusive of applicable taxes)Advertisement fee – Rs. 200 (inclusive of applicable taxes) |
Types of gold loan fees
There are several types of fees involved in obtaining a gold loan. The most common is the processing fee, charged for paperwork and administration. Valuation fees cover the cost of assessing the value of the pledged gold, ensuring it meets the lender's criteria. Foreclosure fees apply if a borrower decides to close the loan early. Additionally, late payment penalties may be imposed if loan instalments are delayed. Understanding these fees ensures a transparent and smooth loan process.
Calculating stamp duty on gold loan agreements
Stamp duty is calculated based on the loan amount and is a percentage set by the respective state government. For instance, if the loan amount is Rs. 5 lakhs and the applicable stamp duty rate is 0.2%, the stamp duty would be Rs. 1,000. Borrowers must account for this additional cost when estimating their total loan expenses. It's essential to calculate the stamp duty beforehand to avoid any surprises during the loan application process.
Stamp duty requirements for gold loan documents
For a gold loan agreement to be legally valid, it must be stamped with the appropriate stamp duty. Documents such as the loan agreement, collateral receipt, and sanction letter require stamping to comply with legal regulations. The stamp duty ensures that the agreement is enforceable in a court of law. Borrowers must ensure all loan-related documents are adequately stamped to avoid any legal disputes or challenges.
State-wise stamp duty rates on gold loans
Stamp duty rates on gold loans vary significantly from one state to another. For example, states like Maharashtra may impose a stamp duty of 0.1%, while others like Tamil Nadu may have slightly higher rates. These rates are determined by the respective state laws. Borrowers should verify the rates applicable in their state before applying for a gold loan, as it can influence the overall cost of borrowing.
Common misconceptions about stamp duty on gold loans
Many borrowers mistakenly believe that stamp duty is optional or avoidable in the gold loan process. However, stamp duty is a legal requirement and not paying it can result in severe consequences. Another misconception is that stamp duty rates are fixed nationwide, but the rates vary from state to state. Clarifying these misunderstandings helps borrowers stay informed and avoid legal issues.
The importance of paying stamp duty on gold loans
Paying stamp duty is crucial to validate the gold loan agreement and make it legally enforceable. Without paying the required stamp duty, the loan documents cannot be used as legal proof in disputes. Stamp duty also ensures compliance with state laws, protecting both lenders and borrowers. Failing to pay can result in legal penalties, delays, and even the invalidation of the loan agreement.
