Lowest Gold Loan Interest Rates

When gold is pledged as collateral and a loan is secured against it, it is referred to as a gold loan. Various banks and NCFCs offer easy gold loans for their customers.

If you are searching for the ‘lowest gold loan interest rate in which bank’, you need to note that there are multiple factors that affect the loan amount as well as the interest rate you can get. A bank-appointed appraiser examines the gold for uniformity and quantity. 

The interest rate is influenced by the MCLR (Marginal Cost of Fund Based Lending Rate) or RRLLR (Repo Rate Linked Lending Rate). Banks that offer gold loans secured by the RRLLR are significantly quicker to notify borrowers when the RBI lowers the repo rate.

Which Bank has Lowest Interest Rate on Gold Loans in 2024?

This section will compare the interest rates, processing fees, and the loan amount offered by various banks and NBFCs in India - 

Note: Rates mentioned as of 1st April 2024 and can be revised by the bank or NBFC without any notice. Please check with the bank or NBFC before applying for a loan.

Benefits of Taking a Gold Loan

Gold loans are a great way to put idle jewelry to good use to fund your financial requirements. Here are some benefits of applying for a gold loan -

• As the gold acts as collateral, the interest rates are on the lower side.

• There is no limitation on what the funds can be used for. 

• The only security that you need to pledge will be your gold jewelry.

• You don’t need a very high credit score to apply for a gold loan.

• The documentation requirements are minimal.

• Banks and NBFCs accept jewelry, gold coins, as well as other forms of gold as collateral.

Factors Affecting Interest Rates and Other Charges

While looking for the lowest gold loan interest rates, you should also notice that gold loans incur other charges. Like all other loans, lenders charge a processing fee for gold loans as well. Apart from this, gold loans may have valuation charges.

Let us look at the factors that affect the interest rates on gold loans -

• The price of gold varies and it plays an important role in deciding the interest rate of a gold loan. When gold prices are high, you are more likely to get a lower interest rate.

• Inflation leads to a drop in currency’s value, which means people accumulate more gold. This, again, pushes the prices of gold higher if it lasts for long. So, during inflation, you might be able to get gold loans at lower interest rates.

• Your existing relationship with the bank or NBFC also plays a role in deciding the interest rates. You can negotiate for lower interest rates if you have an ongoing relationship with the lender.

Who Can Take a Gold Loan?

After learning about the ‘lowest gold loan interest rate in which bank’, are you curious who can avail of a gold loan?

The eligibility criteria for a gold loan are similar to those of any other loan. Your credit score, age, income, etc. play a role in determining your loan amount and interest rate. The value and purity of the gold also play a major role.