What Are the Interest Rates and Fees for Gold Loans Used for Business Expansion?
- Posted: 28th March, 2025
- Updated: 28th March, 2025
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Gold loans for business expansion usually have lower interest rates than other business funding forms, making them an attractive financing option.
| Types of fee | Applicable charges |
| Interest rates | Interest rates for gold loans typically start around 9% per annum but can vary significantly based on lender policies, the loan amount, tenure, quality of gold collateral, and the applicant's creditworthiness. |
| Processing fees | Processing fees can typically be up to 5%, though some financial institutions may specify a minimum fee. |
| Stamp duty (as per respective state) | It is payable according to state laws and deducted upfront from the loan amount. |
| Cash handling charges | It may be applicable for cash disbursement only. |
| Penal charge | Penal interest rates may apply in case of delayed EMI payments. |
| Convenience fee | A convenience fee may be levied for the release of pledged jewellery. |
| Part-prepayment charges | Part-prepayment charges may vary significantly among lending institutions. Overall, many loan providers are moving towards more borrower-friendly policies by eliminating part-prepayment fees, which can significantly benefit those looking to manage their loan repayment more effectively. |
| Foreclosure charges | Many financial institutions may or may not charge foreclosure fees if the loan is repaid before tenure. |
When applying for a gold loan for business expansion, it is advisable to review and understand the specific terms and conditions associated with each loan provider. Read all terms and calculate the total costs involved before taking a loan. Opt for loan providers with lower interest rates and minimal charges to maximize benefits.
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