What Are the Interest Rates and Terms for Gold Loans Used for Education?

Typically, gold loans for education have the following terms and interest rates:

• Interest Rates: Generally, range from 9% to 15% per annum based on the loan provider, loan amount, loan-to-value (LTV) ratio and applicant profile. Rates and terms will differ across financial institutions.
• Tenure: Maximum tenure is usually up to 60 months or 5 years, which can be aligned with course duration. However, some lenders may allow longer tenures depending on their policies.
• EMI options: Options typically include monthly reducing principal Equated Monthly Instalments (EMIs) or interest-only EMIs with a balloon payment of principal at maturity.
• Moratorium: Some financial institutions may offer education loan-like options with a 1-2 year moratorium on principal repayment.
• Processing Fees: They typically range up to 5% of the loan amount plus applicable taxes, but they can be lower for online applications.
• Prepayment: Usually allowed after an initial period of 6 months. Charges are often up to a specific percentage of the outstanding principal.
• Penal Interest: Additional fees may be charged for delayed instalments or repayment default.
• Auction Terms: Pledged gold may usually be auctioned after 90 days of continuous default.
• Top up loan: Many lending institutions offer a facility to avail additional loans within an approved limit by pledging more gold later."