Processing fee for gold loan
Lets first talk about what processing fee means. See when you apply for a loan to a bank or NBFC. They take a certain amount of application fees for processing your loan application from their system. Even though this practice is widely acceptable but most people don’t like paying before taking a loan.
Now coming to your question yes, you need to pay some processing fee to a bank/NBFC, but the processing fee is almost negligible. Also in some cases, banks don’t even ask for processing charges when someone applies for a gold loan. The main reason behind this is that gold loan is a secure way of providing a loan amount to a customer. As a result, gold loan interest rates are very affordable.
The pre-processing charges of gold loan stay in between the range of 0 - 2%.
If you compare this with another loaning scheme, you will find out that gold loan is the only loaning scheme which provides so many extra benefits to a borrower.
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