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Interest Rate on Gold Loan refers to the percentage of interest charged by a lender on the borrowed amount, which is secured by providing gold jewellery and assets as collateral. This rate represents the cost of borrowing and is typically expressed as an Annual Percentage Rate. It determines the additional amount that borrowers must repay over and above the Principal Loan Amount during the Loan Tenure.The Interest Rate can vary based on factors such as the lender's policies, prevailing market conditions, Loan Amount, tenure, purity, weight of the gold and the borrower's creditworthiness.
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Gold Loan Interest Rate & Charges
Gold Loan Interest Rate by ICICI Bank varies based on various categories like loan amount, customer relationships etc.
| Interest rate range*: (Q1- April 2024 to June 2024) | Minmum | Maximum | Mean |
|---|---|---|---|
| *Terms and Conditions applied | 9.25% | 18.00% | 14.6% |
Note: (Mean rate = Sum of rate of all loan accounts / Number of all loan accounts.)
| Particulars | Twelve months product | Six months product |
|---|---|---|
Processing Fees | Up to 2%* of the loan amount | Up to 2%* of the loan amount |
Foreclosure Charges (For all schemes except Flexi Loans) | Nil - if the loan is pre-closed after 180 days. | Nil - if the loan is pre-closed after 120 days. |
0.50% - if the loan is pre-closed within 180 days. | 0.50% - if the loan is pre-closed within 120 days. | |
1% - if the loan is pre-closed within 90 days. | 1% - if the loan is pre-closed within 60 days. | |
2% - if the loan is pre-closed within 30 days. | 2% - if the loan is pre-closed within 30 days. | |
Foreclosure Charges (For Flexi Loans) | 2% if the Flexi Gold Loan is closed within 1 month of account opening or renewal. | 2% if the Flexi Gold Loan is closed within 1 month of account opening or renewal. |
Gold OD | 1% of the facility amount if the facility is prepaid within 11 months or post 30 days of auto-renewal. | NA |
Valuation Charges | For Loans: Up to ₹ 3 lakh: ₹ 350 Greater than ₹ 3 lakh up to ₹ 10 lakh: ₹ 750 Greater than ₹ 10 lakh: ₹ 1,500 | For Loans: Up to ₹ 3 lakh: ₹ 350 Greater than ₹3 lakh up to ₹10 lakh: ₹750 Greater than ₹10 lakh: ₹ 1,500 |
Top-up Charges | 1% of the Top-up amount subject to a minimum of ₹ 250 | 1% of the Top-up amount subject to a minimum of ₹ 250 |
Documentation Charges** | ₹ 500 for Flexi Loans | ₹ 500 for Flexi Loans |
Renewal Fees | a. Up to ₹1 lakh: ₹ 350 b. Greater than ₹ 1 lakh up to ₹ 5 lakh: ₹ 750 c. Greater than ₹5 lakh: ₹ 1,750 | a. Up to ₹ 1 lakh: ₹ 350 b. Greater than ₹ 1 lakh up to ₹ 5 lakh: ₹ 750 c. Greater than ₹ 5 lakh: ₹ 1,750 |
Overdue Handling Charges (delinquent accounts) | 1. ₹ 750 where a notice has been delivered to the communication address and a paper publication is not required. 2. ₹ 1,700 where no notice has been delivered to the communication address and a paper publication is to be done. 3. ₹ 300 for sending an auction notice over and above precedingpoints 1 and 2. 4. ₹ 200 for sending a Loan Recall Notice over and above preceding points 1 and 2 | |
Penal charge on overdue amount | Penal charges will be equal to 5% per annum on the overdue amount, from the due date until the actual payment date plus applicable taxes or other statutory levies, if any. | |
Notes:
- Stamp Duty and other statutory charges – As per the applicable laws of the state.
- GST, TDS, other government taxes, stamp duty, levies etc. as per prevailing rate will be charged over and above these charges. The above fees will not be applicable for Agricultural Loans up to ₹25,000 per customer.
- Penal Charges is not applicable for agricultural loans up to Rs 25,000 per customer.
*Applicable for flexi Gold Loan product.
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Annual Percentage Rate
The Annual Percentage Rate (APR) is a method to compute annualised credit cost, which includes interest rate and processing fee.
The APR calculator does not include charges like stamp duty, Prepayment charges etc.
To calculate the same, please click here to download the APR calculator.
* Terms and Condition apply
Gold LoanAmount & Tenure
| Description | Minimum | Maximum |
|---|---|---|
Loan Amount | Rs 50,000 | Rs 20,000,000 |
Loan Tenure | 6months | 12 months |
FAQs on Gold Loan Interest Rates
What is the Gold Loan Interest Rate?
Gold Loan Interest Rate is the rate at which a financial institution lends money against the value of gold provided as collateral. It represents the cost of borrowing funds.
How is the Gold Loan Interest Rate determined?
Gold Loan Interest Rates are determined by a range of factors including the lender’s policies, Loan Amount, tenure, purity, weight of the gold, Loan-To-Value ratio and the borrower’s credit profile.
Are there any additional charges apart from the Interest Rate?
Yes, lenders may impose additional charges such as Processing Fee, Valuation Fee and Documentation Charges. These should be considered while calculating the total cost of the Loan.
How does the Loan Tenure affect the Interest Rate?
The tenure of your Gold Loan influences the Interest Rate. Loans with longer tenures may have higher Interest Rates compared to Loans with shorter tenures. It is important to choose a Gold Loan Tenure that aligns with your repayment capacity, while also considering the impact on Interest Rate.
What is the Loan-to-Value (LTV) ratio for a Gold Loan?
The LTV ratio is the Loan Amount a lender offers, compared with the value of gold. For example, if the LTV ratio is 75%, you can get a Loan of up to 75% of the gold's value.
Does my Credit Score affect the Gold Loan Interest Rate?
No. Credit Scores do not affect Gold Loan Interest Rates. This is because Gold Loans are Secured Loans.
Is the Interest Rate on Gold Loans fixed or variable?
Gold Loan Interest Rates can either be fixed or variable, depending on the lender's terms. Fixed rates remain constant throughout the Loan Tenure, while variable rates can change, based on market conditions.
Can I prepay my Gold Loan and are there any penalties?
Most lenders allow prepayment of Gold Loans, but some may levy Pre-closure Charges. It is important to check the specific Terms and Conditions of the Loan Agreement.
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