Hidden Charges in Gold Loans and How to Spot Them
By SonaFin Editorial Team · · 6 min read
In short: Beyond the interest rate, gold loans can carry processing fees, valuation or appraisal charges, documentation fees, late-payment penalties and foreclosure charges. Ask for the full fee schedule before you sign.
Charges to look for
Processing or service fees are usually charged upfront, often as a percentage of the loan amount. Valuation or appraisal fees cover testing the gold. Some lenders also charge for documentation, insurance, or safekeeping, and add GST on fees.
Charges that appear later
Late-payment penalties, a higher rate after a missed due date, renewal fees, and foreclosure or part-payment charges can add to the cost after you have taken the loan. Some lenders also apply a minimum interest period, so closing early does not reduce interest as much as you might expect.
How to spot them
Ask for the key facts statement or fee schedule, and check the total you will pay, not only the monthly figure. Compare lenders on total cost for the same amount and tenure. If a fee is not written down, ask for it in writing before you proceed.
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