Which gold loan is the cheapest?

The cheapest gold loan is not simply the one with the lowest advertised interest rate, but rather the one that offers the lowest overall cost after factoring in all associated charges and conditions. To find the most affordable gold loan, you should start by comparing interest rates from several lenders, as these can range anywhere from around 8% to 24% per annum in India as of May 2025. But don’t overlook other costs—processing fees, valuation charges, documentation charges, and even prepayment penalties can add up and affect the total amount you’ll repay.

It’s also wise to consider the loan’s repayment structure. Choosing a shorter tenure can help reduce the total interest paid, and some lenders may offer better rates for shorter loans. If you have a good credit history or an existing relationship with a lender you may be able to negotiate a better deal. The purity and quality of your gold can also influence the rate you’re offered; higher-purity gold often secures more attractive terms.

Here are a few practical tips:

• Always compare the effective interest rate, not just the base rate.
• Ask for a complete list of all fees and charges before signing any agreement.
• Consider making part-prepayments if allowed, as this can further lower your interest burden.
• Read the fine print before to avoid hidden costs.

By being diligent and comparing all aspects, you can identify the gold loan that is truly the most cost-effective for your needs.