Tips for getting the best gold loan based on current gold rates

Gold loans are excellent tools when it comes to getting quick liquidity without selling your precious jewellery. When you plan to secure a gold loan, understanding the current gold rates is crucial. Whether you’re in Mumbai, Lucknow, or any other part of India, the gold rate today can significantly impact the loan amount you receive. 

Let’s explore, the gold rate today in Mumbai and some practical tips to help you get the best gold loan based on the current gold rates.

1. Keep a tab on the current gold rate in your city

Before you approach a lender, it’s important to know the current gold rate in your city. Gold rates can vary from one city to another due to nuances, including local demand, taxes, and market conditions. For instance, the gold rate today in Mumbai might differ slightly from the gold rate today in Lucknow. By checking the rates beforehand, you’ll have a better idea of the value of your gold and the loan amount you can expect.

2. Understand the loan-to-value (LTV) ratio

The LTV ratio is the percentage of the gold’s value that a lender is willing to loan you. The Reserve Bank of India (RBI) has set the maximum LTV ratio for gold loans at 75%. However, some lenders might offer lower LTV ratios.

For example, if the gold rate today in Mumbai is ₹5,000 per gram, and you have 100 grams of gold, the maximum loan amount you can get is ₹3,75,000. Knowing the LTV ratio helps you understand how much money you can borrow against your gold.

3. Keep an eye on interest rates

Interest rates on gold loans can vary widely between lenders. Some may offer lower interest rates, but charge higher processing fees or other hidden costs. Others might have higher interest rates but more favourable repayment terms. Before zeroing in on one gold loan option, always look at both, the interest rates and the overall cost of the loan. Bajaj Finance offers a gold loan interest rate starting at just 9.50% p.a.

4. Consider the repayment tenure

Gold loans typically come with relaxed repayment tenures ranging from a few months to a few years since it’s a secured loan. Here you must ensure you choose a tenure that suits your repayment capacity and financial situation. With Bajaj Finance, you can choose to repay your gold loan interest monthly, bi-monthly, quarterly, half-yearly or annually. Though it is important to note that the principal amount and pending interest, if any, will be due for payment at the time of loan maturity.

5. Evaluate the purity and weight of your gold

The value of your gold loan is directly tied to the purity and weight of the gold you pledge. It’s a good idea to get your gold assessed by a trusted jeweller before approaching a lender. This way, you’ll have a clear understanding of the gold’s value and can negotiate better terms with the lender.

6. Understand the terms and conditions

Every lender has different terms and conditions for gold loans. Some might have stricter penalties for late payments, while others might offer grace periods or allow part-prepayments without penalties. Make sure you read and understand all the terms and conditions before signing the loan agreement.

7. Choose a reputable lender

Finally, it’s crucial to choose a reputable lender for your gold loan since your valuable assets will be in their custody during the loan tenure. Established banks and well-known NBFCs are usually more reliable and transparent in their dealings. They also tend to offer better customer service and support.

By following these tips, you can ensure that you get the best possible deal on your gold loan and make the most of your valuable assets.

For a reliable and trustworthy gold loan, consider Bajaj Finance. With the Bajaj Finserv Gold Loan, you get your loan at competitive interest rates along with multiple repayment options and a seamless application process to help you get the most value from your gold!