How to reduce gold loan interest?

Reducing the interest on a gold loan requires a bit of planning and careful decision making especially with the wide range of interest rates available in 2025. Here are some practical steps you can take to keep your borrowing costs as low as possible:

• Shop around for the best rate: Interest rates for gold loans can vary significantly between lenders. Take the time to compare offers from different banks and financial institutions. Even a small difference in rate can lead to substantial savings over the loan period.
• Choose a shorter tenure: Opting for a shorter repayment period means you’ll pay less interest overall, as the loan is outstanding for a shorter time. Lenders may also offer slightly better rates for shorter tenures.
• Make part-prepayments when possible: If your lender allows it without penalty, paying off a portion of the principal before the end of the tenure can reduce the interest charged on the remaining balance.
• Select the right repayment structure: Paying both principal and interest together in regular EMIs helps bring down the outstanding amount faster, which in turn reduces the interest burden.
• Maintain a good credit score: A strong credit history can get you better rates. Timely repayments on all your loans and credit cards help keep your score healthy.
• Avoid delays in repayment: Late payments not only attract penalties but also lead to additional interest accrual, increasing your overall cost.

Always review the terms and conditions of your loan, especially regarding prepayment or foreclosure charges, to avoid any surprises. By being proactive and disciplined, you can make your gold loan much more affordable.