How to calculate Gold Loan interest rates?

Gold Loans are Secured Loans that are offered by lending institutions and banks. They are provided to businesses and those who pledge the gold as collateral. Gold Loans are the perfect financial product to build funds by providing gold as collateral. However, you should know how to calculate the Gold Loan interest rates.

Why should you calculate the Gold Loan interest rates?

When you decide to take a Gold Loan, the lender levies an interest rate you need to pay monthly over and above the principal amount. The interest rates paid as Loan repayments create a financial obligation to avoid payment defaults. After the Loan is offered, the lenders add the interest rates when the Equated Monthly Instalment begins until a select tenure.

What if the Gold Loan interest rates exceed the borrower’s spending limit? Since payment defaults on interest payments can build a negative credit score, it becomes crucial to apply for a Gold Loan that comes with a reasonable and bearable interest rate. Furthermore, this also makes the interest rate calculation of utmost importance before applying for a Gold Loan.

Process of calculating Gold Loan interest rates

Gold Loan interest rates changes between lenders. To calculate the total cost of your Gold Loan with its interest rate, you need to use a Gold Loan EMI calculator. It is a free online tool available on the bank’s website. It calculates the monthly EMI payable against the Gold Loan in a few seconds. Here are the basic steps to calculate the interest rate on Gold Loan through the EMI calculator:

Enter the desired Loan amount

Firstly, you need to enter the principal Loan amount required. You need to check the maximum and minimum Loan amount the lender offers before entering the amount.

Enter the preferred Loan repayment tenure

It helps if you fulfilled the Loan repayment tenure, i.e., when can repay the Loan. Mainly, banks offer a maximum and minimum Loan repayment tenure. So, you can choose the term that suits your preferences.

Enter preferred interest rates

The last step is to enter your preferred interest rates. Enter the amount your bank offers and then calculate the payable EMI against the Loan.