A gold loan per gram is a specific type of loan where gold is used as security to safeguard the debt. Based on the value of the gold jewellery that is kept with the lender as collateral, the borrower receives the loan amount.
The interest rate on a gold loan per gram is often higher per gram than other loan types, such personal loans or mortgages. However, it provides immediate access to money when needed.
The interest rates on gold loans in India vary from bank to bank and depend on several factors, including the type of loan, the loan’s period, and the collateral’s value. Banks typically offer the lowest gold loan interest rate to their current customers. Some banks also provide introductory interest rates to potential customers.
What are the benefits of taking a gold loan from Bajaj Finance?
A secured loan known as a “gold loan” is one where the borrower pledges their gold to the lender as security. Since a gold loan often has a lower interest rate than an unsecured personal loan, it is a popular option for borrowers seeking easy access to cash quickly.
Gold loans come with a host of benefits that you can make the most of. Some of these gold loan benefits include:
- Quick processing: Since real gold is used as security for gold loans, processing is swift and banks and other lending institutions can easily offer them. Lending against gold is a safer option for banks since they can easily sell the gold in the event of a default by the borrower. Because of this, banks usually approve these loans within a few hours. The ease of the borrowers will increase due to the quicker processing time.
- Lower interest rate: Gold loans often offer lower interest rates than other financing choices like personal loans, mortgages, or other secured loans because they are secured loans.
- No pre-payment charges: Additionally, you are not subject to any pre-payment penalties if you choose to prepay your gold loan. In the long run, this allows you to reduce your interest payments.
- No collateral required: Gold loans don’t need any collateral, unlike other loans like personal loans and corporate loans. They are thus a practical financing choice for persons who lack assets to use as security.
- Quick and easy approval: It is quick and simple to apply for a gold loan. Within 24 hours of completing your application, you can receive an approval.
Therefore, think about obtaining a gold loan from Bajaj Finance if you’re seeking for a practical and cost-effective financing choice. You will certainly profit the most from it given its many advantages.
What elements affect the interest rate on a gold loan?
Depending on the form of gold loan, a different interest rate is applied. For instance, the interest rate on a standard gold loan will be lower than that of a gold loan for jewellery. This is done so that a gold loan for jewellery can be backed by pricey jewellery while a regular gold loan can be secured by common gold bars or coins.
Both the length of the loan and the interest rate are impacted by one another. The longer the tenure, the lower the interest rate generally is. Because it will take longer for the bank to recoup its investment, it is ready to offer a lower interest rate.
The value of the collateral is a critical factor that influences the interest rate on a gold loan per gram. The value of the collateral will determine how much interest the bank will charge. This is so that the bank, which offers the best terms on gold loans, may offer the borrower a better deal.
According to the type of loan, the term of the loan, and the value of the collateral, different gold loan interest rates are applicable in India. However, you might be able to get a good bargain on a gold loan if you compare interest rates from different institutions and choose the one that best suits your needs.
People who require immediate access to funds frequently choose the gold loan per gram. It is also helpful because you can obtain the loan amount without selling your gold. The gold loan can be used for anything, including starting a business, covering unexpected medical expenses, or going on vacation. You prevent any fees, simply be sure to repay the loan on time.