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.
This section will compare the interest rates, processing fees, and the loan amount offered by various banks and NBFCs in India -
| Name of the Bank / NBFC | Rate of interest (p.a) | Processing fee | Loan amount (in Rs.) |
|---|---|---|---|
|
8.85% |
0.50% of the loan amount, minimum Rs.500 + applicable GST |
Rs.50,000 to Rs.50 Lakh |
|
|
8.50% - 17.45% |
1.00% of the disbursal amount (inclusive of applicable taxes) |
Rs.25,000 onwards (Rs.10,000 onwards in rural branches) |
|
|
9.25% |
0.25% of the loan amount (Rs.250 to Rs.2,500) |
Rs.5,000 to Rs.35 Lakh |
|
|
17.00% |
From Rs.300 per case to 0.50% of the loan amount |
Rs.25,001 to Rs.40 Lakh |
|
|
9.00% - 24.00% |
Up to 2.00% of the loan amount + GST |
Rs.20,000 to Rs.1.5 Crore |
|
|
10.00%-19.76% |
1.00% of the loan amount |
Rs.10,000 to Rs.1 Crore |
|
|
10.00% - 16.00% |
Up to 1.00% of the loan amount |
Up to Rs.20 Lakh |
|
|
9.25% |
0.30% of the loan amount + GST or Rs.500 + GST, whichever is higher |
Rs.25,000 to Rs.25 Lakh |
|
|
9.30% |
No processing fee for loans up to Rs.10 Lakh. |
Rs.20,000 to Rs.25 Lakh |
|
|
9.40% |
No processing fee for loans up to Rs.3 Lakh. |
Up to Rs.50 Lakh |
|
|
8.99% onwards |
No processing fee for loans up to Rs.25,000. |
Rs.1,000/- to Rs.150 Lakh |
|
|
12%-22%, depending on the scheme |
0.25% - 1.00% of the loan amount |
Rs.1,500 onwards, depending on the scheme |
|
|
Please contact the NBFC for more details. |
Please contact the NBFC for more details. |
Rs.1,000 onwards, depending on the scheme |
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.
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.
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.
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.
In India, gold isn't just a metal; it's so much more. It has decorative value and is a popular investment and savings option for many people. Apart from purchasing gold for investment or savings, people may choose to use their gold for gold loans, which is fast gaining popularity.
There are multiple lenders in the market today offering gold loans. The perfect one to choose will solely depend on your requirements. Your collateral, repayment capacity, and urgency will be determining factors in choosing the right vendor for you.
The interest rate on a gold loan will depend on each case. But in general, the interest rates for gold loans at HDFC and SBI start at the lowest.
No, you cannot get an interest-free gold loan. Like other credit products, whenever you borrow money, you will be charged interest.
Muthoot Finance has many schemes available. The minimum amount that you can get from Muthoot Finance is Rs.1,500.
To get a gold loan, you need to pledge your gold jewelry or goods to the vendor. The money is disbursed to you as usual. Once you repay the money throughout your tenure, your gold will be given back to you.
Most banks or NBFCs that provide gold loans, give loans against just gold jewelry. Even in gold, it is easier to get a loan against 22K gold. However, some vendors even provide loans against 18K gold.
The repayment process starts immediately, with the borrower expected to pay EMIs once a month after the loan is approved. However, this process can vary based on the terms and conditions imposed by the lender.
The minimum and maximum amount of gold loan that you can get varies from vendor to vendor. Gold loans start from as low as Rs.1000, given by the Federal Bank and Mannapuram Finance.
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