Gold Loan Interest Rate: You are in urgent need of money and fear that taking a loan from a bank or other financial institution may take several days and your work may get spoiled. In such a situation, you can take help of gold loan. For this, you will have to mortgage your home’s jewelery or other gold items with a bank or other loan giving agency. After repaying the loan, you will get the pledged jewelery back. Not every type of gold can be pledged for gold loan. Most banks mortgage only jewellery. Its purity should be between 18 carat to 22 carat. Gold jewelery and gold coins sold by banks are also accepted for SBI gold loan. To repay this, either the EMI is fixed by the banks or a bullet repayment system of three months, six months or 12 months is fixed.
What is Bullet Repayment in Gold Loan?
Under Bullet Repayment System, the pledged jewelery or gold is taken back by repaying the entire loan including interest in one go. According to the website of HDFC Bank, under this you do not need to repay the gold loan through monthly EMI. After the loan term, you have to deposit a lump sum amount along with the interest on the entire loan. However, the loan interest is calculated only on monthly basis. Bullet repair period is three months, six months or a year.
Muthoot’s interest rate is highest, Kotak Mahindra’s is lowest.
While taking a gold loan, it is important for you to know what is the rate of gold loan of which bank. Kotak Mahindra charges the lowest fixed interest rate of 0.88 percent every month. Whereas Muthoot Finance charges an interest rate of 22 percent per annum, although a rebate of two percent is given on monthly payment. Gold loans with low interest rates include 8.40 percent to 9.50 percent of Central Bank of India, 8.50 percent of UCO Bank, 8.80-9 percent of Indian Bank, 8.9 percent of Federal Bank, 9 percent of Canara Bank and 9 percent of State Bank and There are more than that.
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