Interest charge on a gold loan differs with every financial institution. Here is a fast take a look at banks offering the best (*5*) on gold loans.
Gold loan for non agricultural function
According to the RBI Master round dated April 1, 2022, “Banks should fix monthly / quarterly instalments for repayment of gold loans for non-agricultural purposes taking into account the pattern of income generation and repayment capacity of the borrowers and such gold loan accounts may be treated as NPAs if instalments of principal and / or interest thereon are overdue for more than 90 days.”
Gold loan for agriculture function
“As regards gold loans granted for agricultural purposes, interest is required to be charged as per Supreme Court judgement at yearly intervals and payment should coincide with the harvesting of crops. Accordingly, such advances will be treated as NPA only if instalments of principal and / or interest become overdue after due date,” as per RBI.
Gold loan LTV
LTV ratio, or loan-to-value ratio, is the portion of the collateral’s market worth that the lender can give you as debt. According to the RBI, “fresh gold loans sanctioned on and after April 1, 2021 shall attract LTV ratio of 75 per cent.”
Gold loan EMI reimbursement mode
According to the SBI web site, “Repayment of Principal and Interest will begin from month following the month of disbursement.
- Liquid Gold Loan (Overdraft): Overdraft Account with transaction facility. Monthly interest is to be served. The drawing energy of the account might be calculated based mostly on the present market worth of the gold declared by the financial institution now and again.
- 3 Months Bullet Repayment Gold Loan: Interest and Principal on or earlier than finish of time period.
- 6 Months Bullet Repayment Gold Loan: Interest and Principal on or earlier than finish of time period.
- 12 Months Bullet Repayment Gold Loan: Interest and Principal on or earlier than finish of time period.
Repayment interval
Repayment interval additionally varies with every financial institution and relying on the interval. According to SBI, right here is most interval allowed to its clients.
- Gold Loan (EMI based mostly) : 36 months
- Liquid Gold Loan ( Overdraft) : 36 months
- 3 Months Bullet Repayment Gold Loan: 3 months
- 6 Months Bullet Repayment Gold Loan : 6 months
- 12 Months Bullet Repayment Gold Loan: 12 months.
