When opting for this loan, apart from gold loan 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 24% 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 |
3% per annum on Outstanding Balance. Penal Charge will be over and above the interest rate which shall be applicable/chargeable in case of default in repayment of the Outstanding Dues post-maturity. |
| Convenience fee |
Convenience fee of Rs. 149 (inclusive of applicable taxes) shall be levied for part release of ornament(s) pledged. |
| Part-prepayment charges |
NIL |
| Foreclosure charges |
Nil, any time post disbursement of loan |
Types of gold loan fees
When applying for a gold loan, it is important to understand the different types of fees that may be charged by the lender. These charges can affect your overall repayment amount and should be factored into your financial planning. Here is a table outlining the common gold loan fees:
Type of Fee
|
Description
|
Processing Fee
|
Charged to cover documentation, paperwork, and administrative expenses.
|
Valuation Fee
|
Applied for evaluating the gold’s purity and weight to determine its market value.
|
Foreclosure Fee
|
Charged if the borrower chooses to repay the loan before the end of the tenure.
|
Late Payment Penalty
|
Imposed when loan instalments are delayed beyond the due date.
|
Renewal Fee
|
Some lenders charge this when extending the loan tenure beyond the original term.
|
Part-Payment Charges
|
Certain lenders may apply a fee for making partial payments during the tenure.
|
**The charges listed above are general in nature and may vary across lenders. Please note that these are not specific to Bajaj Finance. All charges applicable on gold loan from Bajaj Finance are clearly communicated upfront.
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
When applying for a gold loan, it is important to understand that stamp duty charges vary significantly across different Indian states. Stamp duty is a government fee that legalises the loan agreement, making it enforceable. Typically, stamp duty on gold loans ranges between 0.1% and 0.5% of the loan amount, depending on the state’s regulations.
It is also essential to know that gold-plated stamp items, often marked with stamps like "gold plated stamp," are generally not accepted as collateral for gold loans. These items have only a thin layer of gold over another metal and do not meet the purity standards required by lenders.
Here is a table summarising approximate stamp duty rates for gold loans in select Indian states:
State
|
Approximate stamp duty rate
|
Maharashtra
|
0.1%
|
Tamil Nadu
|
Up to 0.2%
|
Rajasthan
|
0.25% plus applicable surcharge
|
Karnataka
|
0.5% for loans ₹1 lakh and above
|
Other states
|
Varies as per state laws
|
Before applying for a gold loan, borrowers should verify the exact stamp duty applicable in their state to accurately understand the total borrowing cost.
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 a crucial step when availing a gold loan, as it validates the loan agreement and makes it legally enforceable. Without the required stamp duty, the loan documents lose their legal standing, which can create complications in case of disputes or defaults. This government-imposed fee ensures compliance with state-specific laws and offers protection to both lenders and borrowers. Moreover, non-payment of stamp duty can lead to penalties, delays in loan processing, and even the cancellation of the agreement. It is also important to note that items marked with a gold plated stamp are not accepted as collateral, as they lack the required purity.
