Gold Loan Interest Rates

December 05, 2022

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Many financial institutions in India allow the recipients of the loan to raise funds by pledging their gold reserves as collateral. The gold loan interest rates vary from 7% per annum to 29% per annum. The applicant can avail of a loan of up to Rs 1.5 Crores. And the tenure for repayment ranges from 3 months to 4 years based on the scheme opted for by the recipient of the loan.

Gold loans are secured loans that have existed in one form or the other since ancient times. These secured loans allow the borrower to raise funds through their gold reserves. An individual that owns gold can avail of lucrative interest rates against the loan from NBFCs and financial institutions.

Comparison: Gold Loan Interest Rates with Other Lenders

The following table showcases an in-depth comparison between the goal loan interest rates offered by various banks and NBFCs.

Loan Providers Interest Rates (Per Annum) Amount Tenure
SBI Gold Loan Up to 7.7% Rs 20,000 to Rs 50 Lakhs Up to 36 Months
HDFC Gold Loan 11% to 16% Rs 25,000 onwards 3 to 24 Months
Mannapurram Gold Loan 9.90% to 24% Rs 1,000 no maximum limit 6 to 12 months
Muthoot Gold Loan 11.9% to 27% Rs 1,500 7 days to 36 months
Canara Gold Loan 8.15% Rs 5,000 to Rs 35 Lakhs 12 months to 24 months
PNB Gold Loan 8.05% – 8.4% Rs 25,000 to Rs 10 Lakhs As per the terms and conditions of the lender
Kotak Gold Loan 8% to 17% Rs 20,000 – Rs 1.5 crores Upto four years
Federal Gold Loan 7.99% onwards Rs 1,000 – Rs 1.5 Crores As per the terms and condition of the bank
Central Bank of India 9.05% onwards Rs 10 Lakhs to Rs 40 Lakhs Up to 12 Months
Indian Bank Gold Loan 7% onwards Upto Rs 75 Lakhs Up to 36 months
IDBI Bank Gold Loan 7% onwards Upto Rs 75 Lakhs Up to 36 months
IndusInd Bank Gold Loan 8.75% – 16.75% Upto Rs 20 Lakhs Up to 12 months
India Infoline 9.96% to 27% Rs 3,000 onwards Up to 24 months
BOB Gold Loan 8.70% – 8.80% Up to Rs 25 Lakhs 12 months to 24 months
Karnataka Gold Loan 8.88% – 9.18% Upto Rs 25 Lakhs 6 months to 12 months

*It is to be noted that the above mentioned gold loan interest rates are subject to market fluctuations and volatility.

SBI Bank Gold Loan

The State Bank of India has established online and offline channels to raise funds from SBI Gold Loan and SBI realty Gold Loan.

  • The repayment tenure on loan is up to 36 months.
  • The applicant should be over 18 years of age.
  • The applicant can also jointly get a gold loan from the SBI Bank.

HDFC Bank Gold Loan

The interest rates offered on the HDFC Gold Loan interest rates are lucrative. The applicants can avail of a quick disbursement and overdraft facility.

  • Processing Fee of 1% is charged on the loan amount.
  • The applicant is required to produce minimal documents during the application process.
  • The bank has established a diverse set of repayment methods such as OD, Term Loan, and bullet repayment.

Axis Bank Gold Loan

The customer can also apply online for an Axis Bank Gold Loan, where the funds are disbursed efficiently. And the collateral is safeguarded meticulously.

  • The gold pledged is safeguarded in the bank’s vault.
  • Instantaneous disbursement of the loan amount.
  • Customers are free to pledge their gold coins and ornaments.

Canara Bank Gold Loan

The application process for the Canara Bank Gold Loan can be concluded with minimal paperwork.

  • Hassle-free application process
  • The disbursement of the gold loan is almost immediate.
  • The applicant does not have to produce any guarantee to avail of the loan.

Bank of Baroda Gold Loan

A recipient of the gold loan from the Bank of Baroda can avail of the facilities such as a demand loan, EMI, and an overdraft. The repayment on the loan is monthly.

  • Minimal documentation
  • The applicant can pledge gold coins and ornaments to raise funds.
  • The applicant should be over 18 years of age.

Karnataka Gold Loan

The Karnataka bank offers gold loans to their customers to fulfil their personal needs and caters to agricultural fund requirements.

  • Quick Sanctioning of Loan
  • Efficient application process
  • Pledging of gold ornaments

PNB Gold Loan

The bank has established various online and offline channels to apply for Gold Loan.

  • No prepayment charges are levied from the applicant.
  • Efficient application process
  • The collateral is exclusive to 22-carat gold.

IIFL Gold Loan

The IIFL is a financial institution that offers lucrative interest rates on gold loans.

  • The approval for a gold loan can take as little as 5 minutes. And the loan amount can be disbursed in 30 minutes.
  • repayment flexibility.
  • Personalised gold loan schemes for the applicants.

Kotak Mahindra Gold Loan

Applicants can avail of a gold Loan with the Kotak Mahindra Bank by pledging gold ornaments of at least 18 karats.

  • Minimal Documentation
  • Easy disbursement of Fund Amount
  • Processing fee of 2% is charged on the loan amount.

Federal Bank Gold Loan

The applicant can obtain a sum to realise their fund requirement for agricultural and personal purposes.

  • The collateral must maintain a 22-carat purity.
  • Transparent application process with no hidden charges
  • The loans are immediately sanctioned.

Central Bank Gold Loan

A bank provides a gold loan to the applicant so that they can fulfil their fund requirement.

  • Hassle-Free application process
  • The scheme is limited to gold reserves that maintain a purity of 22 carats.
  • The loan recipient is allotted a repayment tenure of not more than 12 months.
  • A processing fee charged on the loan amount is 0.75%/

Indian Bank Gold Loan

This scheme allows the applicants to employ gold reserves to fund their agricultural needs.

  • Hassle-free loan application process
  • No hidden charges are levied.
  • The interest rates on the gold loan commence at 7% per annum.

IDBI Bank Gold Loan

This scheme for the IDBI bank allows customers to raise funds to meet their expenses.

  • The loan processing is transparent. There are no hidden charges.
  • Disbursement of the loan is hassle-free.

IndusInd Bank Loan

The IndusInd Bank, offers lucrative interest rates on their Gold Loan Schemes to cater to the fund requirements of their customer base.

  • Minimal Documentation and quick disbursement.
  • Hassle-free loan application process

Features of a Gold Loan

The gold loan recipient can avail of the following features utilising their gold reserves for the obtainment of funds:

  • The funds attained from a gold loan can be utilised for a myriad of purposes such as higher education, medical expenses, travelling etc.
  • Gold loan interest rates are competitive due to the presence of security.
  • Tenure of a Gold Loan ranges from 3 to 48 months.
  • The borrower can opt for various repayment options available to the consumers. They can pay their instalments through monthly EMIs, lump sum payments of the loan at the time of maturity, monthly payments of interest and repayment of the principal amount at the time of maturity.

Documents Required to Avail of a Gold Loan

The applicant is required to furnish the following documents to the financial institution to conclude the application process:

  • Passport-Size Photograph
  • Filled out application form
  • Identification Proof
  • Address Proof
  • Signature Proof
  • PAN Card
  • Form 60
  • Age Proof
  • Loan Disbursement Documents

Factors that Affect Gold Loan Interest Rate

The following factors impact the gold loan interest rates. It is advisable that an applicant must consider these parameters before applying for Gold Loan from a financial Institution.

Loan Amount

The loan amount granted to an applicant would be concerning the value of the gold assets pledged. The lenders usually offer a minimum and maximum amount on the Gold Loan. In case the applicant has a loan amount in mind, they must ensure that they have sufficient reserves so that the financial institution would be able to process the loan request.

Interest Rate

The interest rates offered on these secured loan ranges from bank to bank. The Gold Loan interest rate is generally lower when compared to other products due to the presence of collateral.

Charges

The applicant should also account for the charges levied by the financial institutions. Tariffs such as processing, documentation, and loan overdue fees are often levied on the applicant. One should be mindful of the various charges applicable to the loan to compute total expenses accurately.

Tenure

The repayment tenure of the loan ranges from 3 to 48 months. To make the EMI repayment manageable, the applicant must opt for a loan tenure.

Creditworthiness

The lender’s creditworthiness is also evaluated so that the financial institution can grasp the borrower’s repayment habits. Some banks also examine the CIBIL score as it gives a numeric synopsis of the applicant’s credit history.

Eligibility

The applicant must also refer to the eligibility criteria set by the banks to ensure they meet the prerequisites.

Compare

A diverse range of financial institutions and banks offer Gold loans with lucrative interest rates. The individual inclined to avail of a gold loan must compare the interest rates, processing fees, and tenures.

Procedure to Apply for a Gold Loan

 An individual must implement the following steps to successfully conclude their Gold Loan application.

STEP 1: The applicant can avail of various online and offline channels established by banks and financial institutions. One can visit the lender’s official website and select the ‘Apply Now option. The applicant will be redirected to the application form page, which one must fill out accurately, along with all the relevant documents.

STEP 2: In case the lender has not opened any online channel, the applicant must visit the nearest branch of the Bank. However, they must carry all the relevant documents to facilitate the application process without hassle.

STEP 3: The lender would meticulously evaluate the application and documents. After the financial institution vets the application, the loan amount will be disbursed.

Related Resource
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Tushar Gautam is a content writer inclined to enlighten his readers about the world of finance through Urban Money.

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