Gold Loans Get Cheaper? ₹100 Cr Co-Lending Deal Explained

Two NBFCs have teamed up to offer co-lent gold loans in Tamil Nadu. Co-lending usually means lower interest rates for borrowers. Here is what this means if you ever borrow against your gold jewellery.

Here's what happened: Two NBFCs — one a regional retail finance player, the other a large established name — have signed a ₹100 crore co-lending agreement focused on gold loans in Tamil Nadu.. Co-lending partnerships allow two lenders to jointly disburse loans, with each holding a defined share of the loan on their books, often lowering the effective cost for borrowers.. Tamil Nadu is one of India's largest gold loan markets, with households holding significant quantities of jewellery that are regularly pledged for short-term cash needs..

What you should do: Compare gold loan interest rates across at least 3 RBI-regulated lenders — bank rates (Muthoot, Manappuram, SBI) and NBFC rates can differ by 4-6% on the same jewellery value.. Check the Loan-to-Value ratio offered: RBI's 75% LTV cap is the legal maximum, so any lender quoting higher is a red flag — verify their registration on the RBI website.. Before pledging, ask the lender for a written receipt listing the weight and purity of your gold — this protects you if there is a dispute at repayment or auction..

Pro tip: choose a gold loan with a bullet-repayment option (interest monthly, principal at end) — it keeps monthly outgo low and suits irregular income earners like traders or farmers.