Interest rate will be quoted on annualized basis only.
Interest amount will be calculated on the daily outstanding balance in the loan account at the contracted rate.
Interest will be calculated on the basis of 360 days a year.
Compounding, if any, will be provided in specific loan schemes.
All loans carry the fixed contracted rate till closure of account.
Risk related rate of interest
Since a higher LTV (loan per gram) translates to a higher risk interest rate and LTV will be correlated.
Assuming all other factors to be the same a higher LTV loan will attract a correspondingly higher interest rate as compared with a lower LTV loan.
The interest rate applicable will vary from time to time and will be mentioned against the specific operative schemes / loan products.
Maximum rate of interest
The maximum interest rate chargeable has been fixed at 25 % pa with effect from 1st Dec 2012.
Penal / Overdue interest
When the loan remains outstanding beyond the ‘normal’ tenure ( at present 1 year) without FULL servicing of interest overdue / penal interest will be charged at 3% pa (i.e. contracted rate plus 300 basis points) on the amount due and payable till the account is regularized / closed.