Factors Affecting Gold Loan Interest Rates
Interest rates on loan against gold can vary depending on several factors lenders take into consideration. However, the most important of these factors are market price and inflation.
Inflation
When inflation is high in an economy, the currency value goes down and people start investing in gold as a hedge against rising inflation, particularly when it lasts long. The price of gold tends to increase at such times and individuals can get lower interest rates on loans against their gold assets.
Market Price of Gold
The interest rate offered by lenders greatly depends on the current market price of gold. When the price is high, the value of jewellery and coins pledged by borrowers is also high. This means the lenders have a lower risk associated with the loan and they offer competitive interest rates.
See what terms and offerings different lenders have and compare them to find out what works the best for your needs and conditions. The lowest gold loan interest rate may not always be everybody’s requirement
