Gold Loan Calculation

Get to Know More about Gold Loan Calculation

Gold Loan Calculation

Gold Loan Calculation | Image Resource : ptaindia.com

People in India attach considerable cultural value to gold bought in the form of jewelry, coins and bars. They own gold jewelry and wear it to enhance their prestige. The increase in gold prices has helped many in financial crisis to get gold loans at low interest rates. Of recently, the demand for loans against the gold has increased due to the high loan-to-value (LTV) ratio, where about 90 percent of the value of gold is lent by banks and financial institutions as a loan.

How Is Gold Loan Calculated?

You can avail gold loans either by visiting a bank or any financial institution in person or online. When online, the loan manager visits your home, does the gold loan calculation for the jewelry pledged in terms of weight and purity and completes the loan application. Once it is done, you get the money credited to your bank account immediately.

The gold pledged is kept safely in the bank vaults. The gold loan interest calculation differs depending on the institution. It ranges from 10 to 13 percent, with flexible repayment options like:

  • Pay the interest upfront and the principle amount later.
  • Have both the interest and principle paid at the end of the tenure.
  • Pay in equal monthly installments (EMI)

Most institutions offer you the option to extend or renew the gold loan at the present LTV. The other features are you can make partial payments or repay the loan early without having any penalties.

If you want, you can have the idle gold used for a gold loan now.