The Best Bank For Gold Loan In India

A gold loan is a secured loan obtained against the mortgage of gold for a period of up to 36 months.

You can compare gold loan interest rates to find the best gold loan rates. A gold loan can be obtained for as little as INR 1,000.

All banks and major moneylenders offer gold loans. The interest rates and other features vary depending on the banks. But which one is the best?

In this article, we shall learn about the best bank for gold loans in India along with other important details.

Table of Contents

  1. Banks with the Lowest Gold Loan Interest Rate
  2. SBI Gold Loan
    1. Different types of SBI Gold Loan Schemes
    2. Criteria for Obtaining an SBI Gold Loan
    3. Documents Required to Avail of the Loan
  3. How is SBI Better in Comparison to other Banks?
  4. FAQs

Banks with the Lowest Gold Loan Interest Rate

You can get a gold loan from the banks in India with interest rates ranging from 7.30% p.a. to 29% p.a.

You can borrow up to Rs. 1.5 crore with repayment terms ranging from 3 months to 3 years, depending on the loan scheme you choose.

In the event of a financial emergency, you can pledge your gold ornaments and jewelry for funds.

Here are the details:

Interest Rate 7.30% p.a. onwards
Loan Amount Up to Rs. 1.5 crore
Loan Tenure 3 months onwards
Processing Fee 0% - 2% of the loan amount + GST

Several lenders provide the option of receiving a discount on the current interest rate on a loan against gold if the borrower repays the interest on a regular basis.

  • This rebate can range between 1% and 2% of the original interest rate.
  • SBI currently has the lowest gold loan interest rate of 7.30 % for a tenure of up to 36 months, making it one of the best banks for gold loans. A processing fee of up to 0.50 % of the loan amount, with a minimum of 500 rupees, is levied on an SBI gold loan.

Also, PNB is good for gold loans in terms of the loan amount, as it offers gold loans with low fund requirements. Here are the interest rates and tenure details of some other popular Indian banks to check which bank is best for gold loan -

Banks Interest Rate Processing Charges Time period
SBI 7.30% 0.50% of the loan amount, minimum Rs. 500 3 months to 36 months
Canara Bank 7.35% 0.5% of the loan amount, min Rs. 1,000 and max Rs. 5,000 6 months to 12 months
Andhra Bank 7.60% No processing charges 3 months to 12 months
Federal Bank 8.50% No processing charges 6 months to 12 months
PNB 8.75% 0.70% of loan amount + taxes 1 month to 12 months

SBI Gold Loan

SBI Gold Loan has a number of appealing features, some of which are listed below.

Flexible Loan Amount

Loans ranging from Rs. 20,000 to Rs. 50 lakh are available.

Flexible repayment period

The loan can be repaid through EMIs over a period ranging from 12 to 36 months.

Security

Gold items used as collateral are returned upon loan repayment.

Interest rates

Interest rates for the SBI Personal Gold Loan Scheme range from 7.30% per annum to 7.50% per annum, with SBI having sole discretion to change or modify rates. Borrowers are expected to research current interest rates before applying for a loan.

Different Types of SBI Gold Loan Schemes

SBI Gold Loan Schemes Duration Margin
Gold Loan 36 months 25%
Liquid Gold Loan 36 months 25%
Bullet Repayment Gold Loan 12 months 35%

Criteria for Obtaining an SBI Gold Loan

  • Individuals who wish to apply for a loan under this Gold Loan scheme must meet a few basic eligibility requirements.
  • Age – To be eligible for this scheme, a borrower must be at least 18 years old.
  • Income – An applicant must have a consistent source of income. He or she could work in any profession and be able to repay the loan.

Documents required to avail of the loan

  • ID Proof – A valid, government-issued ID Proof (PAN card, DL, Voter's ID, etc.) is required for SBI Gold Loan.
  • Address verification – A valid, government-approved address verification (Utility bill, Passport, DL, etc.)
  • Photographs – Two passport-sized photographs of the applicant are required.
  • Form – An application form that has been duly completed and signed.

At the time of loan disbursement, the following documents must be provided to the bank:

  • Letter of Arrangement
  • Old Ornaments Take Delivery Letter
  • DP Remarks
  • DP Note Take Delivery Letter

How is SBI better compared to other banks?

Charges SBI HDFC Axis ICICI
Interest Rate 7.30% p.a. onwards 8.95% p.a. to 17.20% p.a. 12.50% p.a.to 17.50% p.a. 10% p.a. - 19.76% p.a.
Processing Fee 0.25% + GST 1% + GST 1% + GST 1% of the loan amount
Foreclosure charges NA 1% of the outstanding loan amount 0% - 2% of the loan amount 0% - 1% of the outstanding principal amount
Penal interest NA NA 2% of the overdue amount per month NA

An 18% GST rate is applicable to banking services and products starting from July 1st, 2017.


Best Bank for Gold Loan - Related FAQs

On the gold loan offered by SBI, a margin of 25% is applicable.

This loan scheme provides a minimum loan amount of Rs. 20,000.

Loans are available in the form of either an overdraft or a demand loan.

Yes, a demand loan has a maximum repayment term of 30 months, whereas an overdraft has a maximum repayment term of 36 months.

The repayment process starts immediately, with the borrower expected to pay EMIs once a month after the loan is approved.