Gold Loan Interest Rate: Tips to Calculate

Gold is a highly valued asset that is considered as a potential global standard in the social economy. In our nation, it is not only an asset but also an essential part of our family and cultural heritage. However, gold can also help you to get secured loans that can help you to meet ends during a crisis or invest in your business. Today, we will enlighten you about the Gold Loan calculator and how to determine the same!

Gold Loan Interest Rate

When a loan is taken from a financial institution while using gold, including bank-issued coins, jewellery, etc. as collateral, it is known as Gold Loan. The gold is considered as potential security for the loan payment. The loan amount is considered by taking a certain percentage of the market value of the gold. The rate depends on a variety of factors like the current market value of gold, the purity of the gold submitted, etc. 

 

Gold, being a high valued asset, can help you to get secured loans and that gold is taken as a security in case of potential loan defaults. Your gold is secured and insured for the term of the loan and is returned to you upon the completion of the loan payment. Let us understand the factors in detail that help you to determine the value of the loan based on the gold:

 

– Purity and Net Weight: This factor is especially important if you are using your jewellery gold as a determinant. The purity in jewellery based gold is often 18 to 24 Carats based on the net weight of the gold. The bank will not consider gems and other stones in the jewellery while determining the net weight.

 

– Price: Once the purity and net weight of the gold is determined, the bank will now multiply the same with the current rate of gold to determine the exact value. As per the instructions of the Reserve Bank of India, the net loan amount should be calculated based on the value of gold for the last 30 days before submitting the gold.

 

Loan to Value Ration: Loan to Value Ratio or LTV is applied at a rate of up to 75 percent on the value of the jewellery calculated to determine your loan amount. If you want to take a value above  then the bank may offer you the same at a lower interest rate.

In order to get a better value determination, please communicate for the same.

How to Calculate the Gold Loan Interest Rate?

A gold loan is very beneficial if you have kept it as an asset to use when a financial requirement arises. However, you must know the exact process of how the interest rate is calculated on the gold you pledged as collateral. The gold loan interest rate is calculated based on a standard gold loan interest calculator that helps you to determine a rate based on a standardized system. 

The eligibility for a gold loan is calculated based on the loan per gram of gold, LTV and the net value of the gold pledged as security. The interest varies based on the factors mentioned above along with the consideration of the market value of that gold. 

You can use these factors along with your bank’s gold loan EMI calculator to get the exact determination of the amount of interest that you are eligible to pay. Also, remember that a higher gold loan interest rate will also have a higher EMI amount for you to pay. The final rate will be clearer when you deduct the principal amount of the gold submitted from the total repayment amount. 

Final Words

India is a country that has forever been associated with gold more of a valued emotional asset than a financial one. However, during times of financial crisis, this innovative medium can help you get any necessary funds to solve that personal expense or boost funds into your business. With facilities like a gold loan interest rate calculator, determining the value and the interest on your gold is easy as anything. So, wait no more and get in touch with us today to use your gold for getting loans that can help you solve financial issues.