How do prepayment penalties vary across lenders for gold loans?

Prepayment rules for gold loans aren’t uniform. Each bank or NBFC sets its own policy on the option of prepaying the gold loan. It also depends on whether the loan runs on EMI, bullet repayment, or a fixed rate.

Under RBI directions, floating-rate term loans given to individuals can’t carry foreclosure or prepayment penalties. So, if your gold loan falls in that category, there shouldn’t be a charge. Fixed-rate or short-tenure loans, though, may still attract a small service fee or handling cost.