Understanding All About Gold Loans: Interest Rates And Per Gram Rate

Nov 6, 2020

Understanding All About Gold Loans: Interest Rates And Per Gram Rate

Have you ever faced extreme financial upheaval, leaving you all but broke?

If you have, then you would understand the need for a reliable source of emergency funding to stave off difficulties during such situations. Thankfully, you can use the equity of your gold jewellery to acquire sizable loans from reputed financial lenders.

The past few years have been witness to increasing demand for such loans among the general populace. In fact, India’s gold loan market is expected to reach Rs. 4617 Billion by 2022, according to a report published in the Economic Times.

But, what exactly do you know about gold loan LTV, its interest rates and per gram value of gold? Take a look!

What does Per Gram Rate for Gold Loan Entail?

Gold rates tend to change every day, depending on the precious metal’s price globally. Therefore, the rate of 1 gm of gold a month ago will not be the same as its rate at present. Before you can avail a gold loan, you must determine your ornament’s purity, as well as its weight. Only then can you understand how much you can avail by pledging the gold item in question.

Per gram rate for gold loan is different from the rate for 1 gm of gold. For example, suppose 18K purity gold is priced at Rs. 3000 per gram today. If your pledged item has 5 grams of 18K gold, you should be able to avail up to Rs. 15,000 against it. However, this is not the case.

As per RBI guidelines, gold loan providers can only furnish a loan of up to 75% of the collateral’s market valuation. Therefore, in this case, you can avail a gold loan of up to Rs. 11,250, which translates into a 1 gram rate for gold loan as Rs. 2250.

Remember to inquire about gold loan LTV before availing such credit, as many lenders may offer proceeds lower than 75% of the pledged gold’s worth.

Decoding Gold Loan Interest Rate

Another cause for concern for many uninitiated gold loan customers is the resulting interest rates that they would need to bear. Fortunately, gold loans are secured in nature, meaning you can avail better terms on these loans when compared to unsecured financial products, such as personal loans.

Rupeek Fintech Pvt. Ltd., a renowned digital lender, offers these loans starting from monthly gold loan interest rate of 0.49%.

To put this into perspective, let us assume that you avail two loans – a gold loan and a personal loan simultaneously. The loan amounts (Rs. 1 Lakh) and tenure (6 months) are equal, in both cases.

In the case of a gold loan, if we assume gold loan interest rate charged to be 0.49% per month, you would need to bear interest payments of Rs.664 per month. At the end of 6 months, you would need to repay the principal amount as well.

In case of a similar personal loan with 16% annual interest rate, the monthly EMIs would equal around Rs.9000, making it much harder to manage and repay.

Choosing Your Lender Carefully

Today, several banks and NBFCs offer gold loans to eligible applicants. As such, you need to compare per gram rate for gold loan and other associated factors before proceeding. Rupeek combines the benefits from the bank gold loans and loans from NBFCs, creating the ideal financial product.

With impressive gold loan LTV, higher than most other banks and financial institutions, the lender has made a niche for itself in India’s gold loan sector. Similarly, if you are tired of the excessive interest charges on your gold loan by NBFCs, you choose this company to avail rates which are competitive with the rates offered by most banks in question.

Why Avail a Gold Loan from Rupeek?

  • Substantial Loan to Value

The company offers one of the best LTV ratios in India. For instance, if you want to avail a loan of Rs. 1 Lakh from banks or other gold loan providers, you would need to pledge a higher amount of gold. However, thanks to this particular lender’s substantial loan LTV, you can avail the same Rs. 1 Lakh principal by pledging a substantially limited weight in gold.

Therefore, you can maximize your loan quantum by taking advantage of this NBFC’s optimal 1 gram rate for gold loan.

  • Attractive Interest Rates

While other financial institutions often charge exorbitant interest against gold loans, this lender strives to ensure affordability when it comes to these loans. Here, you can avail such loans at interest rates starting from 0.49% per month. Other non-banking financial institutions are known to levy as much as 2.08% monthly interest rates on gold loans.

This may sound like a small difference on paper but can make a huge impact on your EMI liabilities. For example, annual interest of 25% on Rs. 1 Lakh gold loan can result in substantially higher liabilities when compared to a loan with 0.49% interest per month or 5.88% per year.

  • Doorstep Loan Delivery

Don’t feel like visiting your lender’s offices to avail a gold loan? Well, this lender has got your covered. A loan manager from the company will visit your home on a scheduled date to collect your pledged asset. He/she will value the pledged items to determine their worth and initiate loan disbursal immediately.

  • Loan Disbursal Within 30 Minutes

The loan manager will remain at your home with the pledged jewelry until the loan amount is credited to your account. Disbursal of this amount will occur in just under half an hour. Therefore, these options allow you to avail cash inflow to deal with an emergency financial fix.

  • Minimal Documentation

The financial company does not necessitate applicants to undertake a convoluted and complex documentation process. In fact, you only need to furnish your KYC documents and the receipts for the pledged jewelry to avail gold loans from this NBFC. This further accelerates the application process while reducing hassle.

  • Guaranteed Security for Your Assets

You can reclaim your pledged gold items after repaying the amount borrowed. However, until then, they will remain with your lender. This NBFC takes drastic security measures, like collecting your gold in a GPS-traceable bag from your home and depositing it in the nearest partner bank’s vault, to ensure that your property is safe and sound at all times. It even offers an insurance policy, covering the gold items should they come across any harm during this repayment tenure.

That’s all there is to it! Now you can begin searching for the best 1 gram rate for gold loan from the available options. Regardless of the lender you choose, gold loans offer a viable way for you to utilize the gold jewelry lying inside your bank lockers and safes. Essentially, it is a way of making a dead asset work for you, without depreciating its value.

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