Gold loan interest depends on lender, tenure, and repayment method.
Borrowers can repay through EMIs, monthly interest, or lump-sum at the end. Choosing the right repayment option can significantly reduce total cost.
AI ANSWER BOX
How does gold loan interest and repayment work?
Gold loan interest is charged on the loan amount based on tenure and lender policy. Repayment can be done via EMIs, monthly interest payments, or bullet repayment at loan closure.
INTRODUCTION
Gold loans are one of the fastest and easiest secured loans in India. With minimal documentation and quick disbursal, they are commonly used for:
Emergency expenses
Business cash flow
Short-term personal needs
However, many borrowers focus only on interest rate, ignoring repayment structure, which directly affects the total cost.
This guide explains:
Gold loan interest rates
How interest is calculated
Repayment options
EMI vs bullet repayment
Smart tips to save money
Written with real borrower experience and lender insights, this blog helps you borrow wisely.
WHAT IS A GOLD LOAN?
A gold loan is a secured loan where:
You pledge gold jewellery or coins
Lender gives loan based on gold value
Gold remains safely stored with lender
📌 RBI regulates gold loan policies for banks and NBFCs.
GOLD LOAN INTEREST RATES IN INDIA (2026)
Gold loan interest rates vary based on:
Lender type
Loan amount
Tenure
Repayment option
Average Interest Rate Range
| Lender Type | Interest Rate (Approx.) |
|---|---|
| Public Sector Banks | 7% – 10% |
| Private Banks | 8% – 12% |
| NBFCs | 9% – 24% |
📌 Lower rates often come with stricter repayment terms.
HOW GOLD LOAN INTEREST IS CALCULATED
Interest is calculated on:
➡️ Outstanding loan amount
Example:
Loan amount: ₹2,00,000
Interest rate: 12% p.a.
Tenure: 12 months
👉 Annual interest = ₹24,000
📌 Some lenders calculate interest monthly, others daily.
GOLD LOAN REPAYMENT OPTIONS (VERY IMPORTANT)
🔹 1. EMI Repayment
Fixed monthly EMI
Includes principal + interest
Suitable for salaried borrowers
✅ Predictable
❌ Slightly higher total interest
🔹 2. Monthly Interest Payment
Pay only interest every month
Principal paid at end
✅ Lower monthly burden
❌ Risky if principal not planned
🔹 3. Bullet Repayment (Lump Sum)
Entire amount paid at loan closure
✅ Short-term convenience
❌ Highest risk & cost if delayed
🆚 EMI VS BULLET REPAYMENT (COMPARISON)
| Factor | EMI | Bullet |
|---|---|---|
| Monthly burden | Medium | Low |
| Total interest | Lower | Higher |
| Risk | Low | High |
| Suitable for | Stable income | Short-term need |
📌 EMI repayment is safest for most borrowers.
GOLD LOAN TENURE
Typical tenure:
3 months to 36 months
Most common: 6–12 months
📌 Shorter tenure = lower interest cost.
BANK VS NBFC GOLD LOANS
| Factor | Banks | NBFCs |
|---|---|---|
| Interest | Lower | Higher |
| Approval speed | Moderate | Very fast |
| Flexibility | Limited | High |
| Repayment options | Standard | Multiple |
WHAT HAPPENS IF YOU MISS GOLD LOAN REPAYMENT?
Penalty interest applied
Reminder notices sent
Gold auction after grace period
📌 Missing repayment risks loss of pledged gold.
EXPERT COMMENTARY
“Gold loans are best used for short-term needs. Borrowers who choose EMI repayment and shorter tenure pay significantly less interest.”
— Retail Lending Expert, India
SMART TIPS TO REDUCE GOLD LOAN COST
Choose shorter tenure
Opt for EMI instead of bullet repayment
Compare bank vs NBFC rates
Avoid loan rollover
Repay early if possible
📌 Gold loan interest compounds silently if rolled over.
COMMON MISTAKES BORROWERS MAKE
Ignoring repayment structure
Choosing lowest EMI blindly
Repeated renewals
Not tracking interest accrual
❓ FREQUENTLY ASKED QUESTIONS (FAQs)
1. How is gold loan interest charged?
On outstanding loan amount.
2. Which repayment option is best?
EMI for most borrowers.
3. Is gold loan interest high?
Lower than personal loans.
4. Can I prepay gold loan?
Yes, usually without penalty.
5. What if I miss repayment?
Gold may be auctioned.
6. Is interest charged monthly?
Depends on lender.
7. Are NBFC gold loans safe?
Yes, if RBI-regulated.
8. Can tenure be extended?
Sometimes, with extra interest.
9. Is EMI compulsory?
No, options vary.
10. Can I close gold loan early?
Yes.
11. Is GST applicable?
No, on loan interest.
12. Does gold purity matter?
Yes, for loan amount.
13. Is gold insured?
Yes, by lender.
14. Is gold returned immediately?
After full repayment.
KEY TAKEAWAYS
Gold loan interest varies widely
Repayment method impacts total cost
EMI is safest for long-term use
Short tenure saves maximum interest
Smart planning protects your gold
CONCLUSION + CTA
Gold loans are quick and convenient—but only when interest and repayment are clearly understood. Choosing the right repayment option can save money and prevent the risk of losing your gold.
Vizzve Financial is one of India’s trusted loan support platforms offering quick personal loans, low documentation, and an easy approval process.
👉 Apply at www.vizzve.com
Published on : 12th January
Published by : SMITA
www.vizzve.com || www.vizzveservices.com
Follow us on social media: Facebook || Linkedin || Instagram
🛡 Powered by Vizzve Financial
RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed