How does the length of the loan tenure affect the interest rate on a gold loan?

The loan tenure, or duration of the loan, is one of the key factors that impact gold loan interest rates. Here's how tenure typically affects pricing:

• Loans with shorter tenures of 6 months or 1 year generally have higher interest rates. The lender charges more as the principal has to be repaid sooner. On the other hand, longer tenures may come at lower interest rates. The costs are spread over more time, allowing borrowers to make lower periodic instalments. Longer gold loan tenures of 3-5 years allow lenders to offer reduced interest rates as repayment is staggered over time. However, borrowers should assess if longer obligations would be sustainable.
• Besides the length of the loan tenure, the amount borrowed can also impact interest rates for gold loans. Generally, larger loan amounts may come with lower rates. However, if you choose a longer tenure, lenders might increase the rates. 

Note: 

• Many lenders charge penalties if loans are closed before the full tenure. Longer tenure is preferable to avoid this.

Renewing or rolling over the loan after initial tenure may attract cheaper rates for loyal customers.