Top gold loan interest rates

To meet the financial emergency requirement, an individual has various options. Some of these options include taking a loan or redeeming their investments. One such option includes taking a gold loan. Here are the interest rate charged by a bank/N...

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Apart from processing fees and valuation charges, a bank can also charge documentation and foreclosure charges.
To take care of a financial emergency, an individual has various options. These include taking a personal loan or redeeming their investments in financial instruments like the provident fund, mutual funds etc.

When it comes to borrowing from a financial institution, other than availing a personal loan, one can also opt for a gold loan. If you are planning on taking a gold loan (or a loan against gold), here is what you need to know.

What is a gold loan?

A gold loan is a loan against gold. It is a secured loan where gold articles such as gold jewellery, ornaments etc. are taken as collateral by the lending bank/NBFC. The loan is given to the borrower against this gold as collateral.

Where to avail gold loan?
Apart from banks such as SBI, ICICI Bank, HDFC Bank etc., non-banking finance companies (NBFCs) also offer gold loans to individuals. NBFCs which offer gold loans include Muthoot Finance, Manappuram Finance etc.

Minimum and maximum gold loan amount
The amount of loan that an individual can get against a gold article will vary from lender to lender. For instance, ICICI Bank offers gold loans between Rs 10,000 and Rs 1 crore. Whereas the State Bank of India (SBI) offers gold loans between Rs 20,000 and Rs 20 lakh. While, Muthoot Finance offers gold loans starting from a minimum amount of Rs 1,500 with no maximum limit.

Tenure of gold loan
The tenure of the gold loan will also vary from lender to lender. For instance, HDFC Bank offers gold loans with tenures between three months and 24 months. Maximum period of repayment of an SBI gold loan is 36 months. Muthoot Finance offers different types of gold loan schemes that come with different tenures.

Interest rate on gold loan charged by bank and NBFC
Bank / NBFC Gold loan interest rate Processing fee
SBI 7.00% to 7.50% 0.50% + GST
Bank of India 7.40% to 7.45% Rs.125 to Rs. 300 per lakh
Canara Bank 1 Year MCLR (7.65%)
Bank of Maharashtra 7.50% Rs.500/- exclusive of GST.
Uco Bank 8.50%
Indian Bank 8.5% to 8.75%
Lakshmi Vilas Bank 8.80%
Punjab National Bank 8.60% to 9.15% 0.75% of loan amount
Central Bank of India 7.15% to 9.20% NIL
Punjab & Sind Bank 8.10% to 9.35%
Federal Bank 8.50% onwards
United Bank 1 Year MCLR (9.35%)
Dhanlaxmi Bank Starting 9.65% (Fixed)
J & K Bank 10% With monthly rests (Fixed)
Karur Vysya Bank 10.10%
Indusind Bank 10.5% to 16% Processing Fee - 1%
Kotak Mahindra Bank 10.5% to 17% Upto 2%
HDFC Bank 9.90% to 17.90% 1.50% + GST
Bandhan Bank 10.99% to 18.00% 1% + GST
ICICI Bank 10% to 19.76% 1% of loan amount
South Indian Bank 11.90% to 12.40%
Muthoot Finance 12% to 27%
Axis Bank 13.00% 1% + GST
AU Small Finance Bank Up to 24% 1% of loan amount
Manappuram Finance Max 29%
City Union Bank 1 Year MCLR (14.25%)
Union Bank MCLR+1.65% to MCLR+ 2.40%
Bank of Baroda BRLLR +SP+1.75 % 0.50% + GST
Karnataka Bank As per MCLR guidelines.
All data sourced from Economic Times Intelligence Group (ETIG)
Interest rate on gold loan sorted based on increasing order of maximum interest rate charged by bank/NBFC
Interest rate data as on September 25, 2020


What are the documents required?
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To avail a gold loan, the bank or NBFC will ask you to provide various documents. Documents normally required include your proof of identity such as PAN, Aadhaar etc. and proof of address like Aadhaar, passport, Voter-ID card etc, and your photograph. Any additional documents required would vary from lender to lender.

What are the charges?
For loans like home, auto and personal loans, the borrower is usually required to pay processing charges/fees to avail the loan. While taking a gold loan, apart from processing fees, an applicant may be asked to pay for valuation of gold which will be used as collateral by the lending institution. For instance, HDFC Bank charges Rs 250 as valuation fees for loan up to Rs 1.5 lakh and Rs 500 for loan over Rs 1.5 lakh.
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Apart from processing fees and valuation charges, a bank can also charge documentation and foreclosure charges.
Therefore, you should check with the bank and/or NBFC for all the charges that will be levied before availing the loan.

Disclaimer: The data/information given above is subject to change, hence before taking any decision based on it, please check terms and conditions with the bank/institution concerned.

For any queries or changes, please write to us on etigdb@timesgroup.com or call us at 022 - 66353963

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