Gold Loan

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Avail a gold loan from a bank in India with interest rates ranging between 7.5% p.a and 29% p.a. You can avail a loan amount of up to Rs.1.5 crore and repayment tenure starting at 3 months and going up to 3 years depending on the loan scheme availed by you. You can pledge your gold ornaments and jewellery for funds in the event of a financial emergency.
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Gold Loan Details 

Interest Rate  7.50% 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 

Features of Gold Loan

Purpose: You can avail a gold loan in order to finance various needs, such as for educational purposes, medical emergencies, going on a holiday, and so on.

Security: The gold that has been pledged with the bank or the financial institution acts as the security or collateral against which the loan amount is provided.

Tenure options: The tenure options can range from a minimum of 3 months to a maximum of 36 months.

Fees: The other fees and charges that might be applicable on a gold loan are – processing fee, late payment charges/ penalty for non-payment of interest, valuation fees, etc.

Repayment Options: There are three main options offered by lenders to borrowers for the repayment of a gold loan. These are:

  • Repayment in Equated Monthly Installments (EMI)
  • Payment of interest upfront and repayment of the principal loan amount at the end of the loan tenure.
  • Payment of interest on a monthly basis and repayment of the principal loan amount at the end of the loan tenure.

Rebates: Several lenders offer the option of discount on the prevailing interest rate on the loan against gold if the borrower repays the interest regularly. This rebate can be 1% - 2% off on the original rate of interest.

Compare Gold Loan by Top Banks

Gold Loan Providers Interest Rate Loan Amount Tenure
Manappuram Gold Loan Up to 29% p.a. Rs.1,000 to Rs.1.5 crore 3 months onwards
SBI Gold Loan 7.50% p.a. onwards Rs.20,000 to Rs.20 lakh Up to 36 months
HDFC Gold Loan 9.90% to 17.90% Rs.25,000 onwards (Rs.10,000 for rural areas) 3 months to 24 months
ICICI Gold Loan 10% p.a. to 19.76% p.a. Rs.10,000 to Rs.10 crore 3 months to 12 months
Axis Gold Loan 15% p.a. onwards Rs.25,001 to Rs.20 lakh 3 months to 36 months
Canara Gold Loan 7.65% p.a. Rs.10,000 to Rs.10 lakh Up to 12 months
Bank of Baroda Gold Loan 10.35% p.a. Up to Rs.25 lakh Up to 12 months
Karnataka Bank Gold Loan Contact bank for updates Up to Rs.5 lakh per account Up to 12 months
PNB Gold Loan 7.8% p.a. onwards Rs.25,000 to Rs.10 lakh As per the lender’s terms and conditions
India Infoline (IIFL) 12% p.a. onwards Rs.3,000 onwards Up to 11 months
Kotak Mahindra Gold Loan 10.5% to 17% p.a. Rs.25,000 to Rs.25 lakh 12 months onwards
Federal Gold Loan 8.50% p.a. onwards Rs.1,000 onwards As per the lender’s terms and conditions.
Central Bank of India 9.05% p.a. onwards (floating) Up to Rs.20 lakh Up to 12 months

Note: For certain loans, the interest rate has been calculated by taking the lender’s MCLR, as on 14 March 2019, into account.

Manappuram Gold Loan

Benefits/Key Highlights

  • You can avail any one of the 13 gold loan schemes available.
  • You can avail higher loan amount depending on the purity and net weight of the gold pledged.
  • The borrower is not required to have a guarantor to avail this loan.

SBI Gold Loan

Benefits/Key Highlights

  • The lender offers three types of gold loans – Gold Loan, Liquid Gold Loan, Bullet Repayment Gold Loan.
  • The repayment tenures for Gold Loan and Liquid Gold Loan are up to 36 months, while for Bullet Gold Loan it is up to 18 months.
  • Individuals over the age of 18 years can apply for a gold loan from SBI.

    Joint Loan Facility: Gold loans from SBI can be availed by individuals on a single or joint basis.

Penalties/Internal Charges: Applicant will have to pay the applicable gold appraiser charges.

HDFC Gold Loan

Benefits/Key Highlights

  • Processing fee of 1.5% charged on the loan amount availed.
  • Applicants have to submit minimal documents when applying for the loan.
  • Loan processing and approval turnaround is extremely fast.

Penalties/Internal Charges:

  • A valuation fee of Rs.250 for loans up to Rs.1.5 lakh and Rs.500 for loans over Rs.1.5 lakh will have to be paid.
  • Foreclosure charges of 2% plus GST will have to be paid if the loan is closed within a period of 3 months. Foreclosure charges of 1% plus GST will have to be paid if the loan is closed within a period of 6 months.
  • A late payment fee of 2% p.a. over the applicable interest rate will be charged.
  • Stamp duty charges and statutory charges will have to be paid.
  • A renewal processing fee of Rs.350 plus GST is applicable.

ICICI Gold Loan

Benefits/Key Highlights

  • The gold pledged by you is kept safely in a vault.
  • Minimal documentation is required to apply for this loan.
  • The loan will be approved instantly provided your application is approved.

Penalties/Internal Charges:

  • A foreclosure fee of up to 1% may be charged.
  • Applicants will have to pay documentation charges of Rs.199
  • If loan renewal is required, a fee ranging between Rs.300 and Rs.1,000 will have to be paid.
  • The applicable stamp duty charges will have to be paid.
  • Overdue handling charges between Rs.200 and Rs.1,700 will be charged for delinquent accounts.

Axis Gold Loan

Benefits/Key Highlights

  • The gold that is pledged by a borrower is kept in Axis Bank’s bank vaults.
  • The loan amount is disbursed on the same day that the application is made.
  • Customers can avail this gold loan from Axis Bank by pledging their gold coins and gold ornaments.

Penalties/Internal Charges:

  • A valuation fee of Rs.500 is charged.
  • A penal interest of 2% will be charged on a monthly basis on the overdue loan amount.

Canara Bank Gold Loan

Benefits/Key Highlights

  • The loan amount is disbursed in a timely manner by the lender.
  • No guarantee is required to avail this loan.
  • The application process is hassle-free.

    Penalties/Internal Charges:

  • Borrowers will have to pay for the applicable jewel appraising charges.

Bank of Baroda Gold Loan

Benefits/Key Highlights:

  • Any individual who owns gold jewellery, gold coins, or ornaments can avail this loan.
  • You can avail a gold loan from Bank of Baroda if you are aged 18 years and above.
  • Minimal documentation required.

    Karnataka Bank Gold Loan

Benefits/Key Highlights

  • This gold loan can be availed by pledging your gold ornaments.
  • Loans are sanctioned quickly.
  • The application process is extremely simple.

PNB Gold Loan

Benefits/Key Highlights

  • No prepayment charges.
  • The lender offers a convenient application process.
  • Only 22-carat gold is accepted by the lender as security for this loan.

Penalties/Internal Charges:

  • Documentation charges of Rs.500 will be availed.

IIFL Gold Loan

Benefits/Key Highlights

  • Get your gold loan approved in 5 minutes and disbursed in 30 minutes.
  • IIFL offers customised gold loan schemes as per your requirements.
  • Flexible repayment options available.

Penalties/Internal Charges:

  • MTM charges of Rs.500 are levied.

Kotak Mahindra Gold Loan

Benefits/Key Highlights

  • Your gold is kept in a safe and secured environment.
  • Minimal documentation required.
  • Avail gold loan on an instant basis.

Penalties/Internal Charges:

  • The applicable stamping charges will have to be paid by the borrower.
  • Credit appraisal charges will be levied by the lender. This is subject to a minimum charge of Rs.250 and a maximum of Rs.2,000.
  • Commitment charges of Rs.1,250 per quarter or 0.5% per quarter may be applicable.
  • If the loan amount is overdue, a 3% interest on the due amount will be charged.
  • A collection fee may be charged, subject to a maximum of 30% of the overdue sum.
  • Dishonour charges of Rs.750 will be levied per instance.
  • Swap charges of Rs.500 per instance may be charged.
  • If a no due certificate is required, a maximum fee of up to Rs.50 may be levied.
  • A prepayment fee of 2.2.5% of the foreclosed amount is chargeable if the loan is closed 1 month ahead of the tenure.

Federal Bank Gold Loan

Benefits/Key Highlights

  • Gold ornaments that have a purity of 22 carats can be pledged.
  • Loans are sanctioned instantly.
  • There are no hidden charges.

Central Bank Gold Loan

Benefits/Key Highlights

  • The application process is hassle-free.
  • Only 22-carat gold is accepted by the bank.
  • Repayment tenure not to exceed 12 months from the date on which loan was sanctioned.

Gold Loan Eligibility

If you wish to avail a loan against your gold jewellery or ornaments, you should ensure that you meet the eligibility criteria specified by the lender. Keep in mind that the eligibility criteria will vary from lender to lender. Thus, it is advisable to check the eligibility criteria that is specified on the lender’s website before applying for a gold loan. Listed below are the generalised eligibility criteria:

Age of the applicant 18 years and above
Security to be pledged Gold ornaments or articles
Total carats of gold that can be pledged 18 carats or above
Other criteria Applicant must be creditworthy

How to Apply for a Gold Loan?

Step 1: You may be able to apply for a gold loan through online or offline channels. To apply online, you will need to visit the lender’s website and click on the loan product that you wish to apply for, which in this case would be ‘Gold Loan’. Next, you will need to click on ‘Apply Now’, if this option is available on the website. Post this, you will have to enter the required details into the online application form and submit the form online.

Step 2: If there is no option to apply for the loan through the lender’s website, you will need to visit the nearest branch of the lender. Many lenders give customers the option of locating the nearest branch through their official website. Make sure to carry a copy of the required documents with you.

Step 3: Once you submit the application form, the lender will verify your application. If the application gets approved, you will receive the loan amount.

Step 4: A gold loan is a quick and easy way to get funds in the event of a financial emergency. Ensure that you do the required research and avail a gold loan that is suitable for your requirements and repayment capacity.

What are the Documents Required?

Generally, the following documents have to be provided by the borrower in order to avail the gold loan:

  • Duly-filled application form
  • Passport sized photographs
  • Identity proof
  • Address Proof
  • Signature Proof
  • Form 60 or PAN card
  • Proof of age
  • Post-loan disbursement documents, if any.

Things to Consider When Taking a Gold Loan

Listed below are a few things that you should take into consideration before applying for a gold loan in order to ensure that you have a good borrowing experience:

  • Loan Amount: When you avail a gold loan, the loan amount that you receive will be based on the value of the gold that you pledge. Lenders may have also specified a minimum and maximum loan amount. Thus, if you need to avail a particular loan amount, you should make sure that you have the required gold and ensure that it falls within the limits specified by the lender.
  • Rate of Interest: When compared to an unsecured loan, the interest rate charged for a gold loan is lesser since the borrower will have to provide collateral. That said, the interest rate charged will vary from lender to lender, and it is in your best interest to compare the interest rates charged by different lenders.
  • Applicable Charges: In addition to the interest rate, lenders may levy a number of other charges such as the processing fee, documentation fee, appraiser fee, payment default fee, loan overdue fee, etc. These charges, cumulatively, can increase the total cost of the loan. Thus, ensure that you take the charges levied by the lender into account before applying for a gold loan.
  • Tenure of the Loan: The repayment tenure for gold loans can range between 3 months and 36 months. Therefore, you should make sure to take your repayment ability into consideration and opt for a gold loan with a suitable loan tenure.
  • Credibility of the Lender: There are a number of banks and financial institutions that offer gold loans as part of their product portfolio. Before submitting an application to a particular lender, make sure that you check how credible the lender is. You should, thus, check the safety measures that are undertaken by the lender to keep your assets safe, online reviews, customer services channels offered, etc.
  • Repayment Schedule: The repayment schedule for gold loans is quite flexible. Based on the lender that you choose, you may be able to make repayments in the form of EMIs, pay the principal and the interest at the end of the policy term, or pay the interest on a monthly basis and pay the principal at the completion of the policy term. Hence, you should consider which repayment structure suits you best and choose the lender accordingly.
  • Comparison of Loans: It is highly recommended that you compare the features, benefits, and terms and conditions of the gold loans offered by different lenders before applying for a loan.
  • Eligibility Criteria: To increase the chances of your loan application getting approved, you should check the lender’s eligibility criteria before applying for the loan.

Gold Loan FAQs

  • What is a gold loan?

    A gold loan is a method of availing finance/loan against your gold ornaments or jewellery such as bangles, necklaces, bracelets, earrings, pendants, watches, gold coins, etc.

  • Who can avail a gold loan?

    Any Indian citizen can avail a gold loan from banks or non-banking financial institutions (NBFCs) and generally the age criteria ranges from a minimum of 18 years to a maximum of 75 years. This might vary from lender to lender.

  • What are the modes for repayment of gold loans?

    You can either directly walk into a branch to make a cash payment or pay online using the company’s web portal. Based on the lender’s terms and conditions, you may be able to make the payment with your debit card, credit card, etc. Kindly contact your lender for more information on the same.

  • What factors affect the loan amount received against the gold ornaments pledged with the lender?

    Factors such as rate of gold on the particular date, purity of the gold used to make the jewellery, etc. affect the loan amount that you will receive against the gold ornaments pledged with the lender.

  • How long will it take for me to receive the loan amount?

    Lenders usually verify and approve gold loan applications in a timely manner. Once your application is approved, you will receive the loan amount. The disbursal time may vary from a few minutes to up to 48 hours, in most cases.

  • Is it safe to pledge my gold ornaments? What measures does the lender take to ascertain the safety of my assets?

    Most lenders store pledged assets in a strong room that has electronic surveillance technology. Also, lenders may insure the gold ornaments or assets for their total value. That said, given the nature and value of the assets, it is best to do your research with regard to the measures that are taken by the lender to safeguard your jewellery and assets.

  • Can I pre-pay the loan amount?

    This will vary based on the lender’s terms and conditions. Certain lenders may allow you to pre-pay the loan amount at any time, without having to pay a fee for the same. In some cases, certain financial institutions and banks will require you to pay a certain fee if you want to pre-pay the loan amount.

  • What will happen if I am unable to repay the loan amount?

    If you don’t repay the loan amount within the due date, the lender will levy a penalty on the overdue loan amount. If you do not repay the loan amount even after multiple reminders, the lender may auction your gold ornaments to recover the amount that is due.

  • Do I have to be an existing customer of a bank/financial institution to avail a gold loan?

    Most lenders will allow you to avail a gold loan even if you are not an existing customer, provided that you have a good credit score. In certain cases, the lender may require an existing customer to introduce you before you apply for the loan.

  • How do I check how much I am eligible to borrow?

    Most lenders have an eligibility calculator on their respective websites, which you can use to know how much you are eligible to borrow. The amount that you will be allowed to borrow will be based on the value of your ornaments or jewellery.

  • Am I required to have a guarantor to apply for a gold loan?

    Most lenders who offer gold loans do not require prospective applicants to have a guarantor. However, for high-value loans, you may be required to have a guarantor.

News About Gold Loan

  • LTV on Loan hiked by RBI to mitigate the effect of Covid19

    In order to reduce the financial burden caused by the effect of Covid19, the Reserve Bank of India (RBI) has decide to hike the LTV limit on gold loan. This decision was taken during the bi-monthly Monetary Policy meeting.

    According to the guidelines, loans sanctioned by lenders against any gold ornament pledged for non-agriculture purpose should not exceed 75% of the value of gold ornament or jewelry. RBI has decided to hike permissible loan to value ratio (LTV) to 90%. This decision came into effect on August 6 this year and will remain in effect till March 31, 2021.

    12 August 2020

  • Gold loans Interest rates become cheaper

    The increasing gold prices might be a dampener for purchasing gold. However, for people looking to raise funds fast for meeting their financial needs, the price rise would mean that they can now mobilise higher amounts via gold loans at lower interest rates. The RBI (Reserve Bank of India) has also cut its repo rate. After this, the banks have now reduced the interest rates on gold loans by around 40 basis points (bps).

    The LTV (loan-to-value) for gold has hiked nearly 11.3% since the lockdown had been announced. Gold LTV, which had reached Rs.2,875 per gram on 24 March, and had stood at Rs.3,197 per gram on 10 June.

    16 June 2020

  • Apex Co-Operative Bank in Tamil Nadu offering gold loan with lower interest rates

    The Tamil Nadu State Apex Co-Operative Bank Limited are offering a gold loan scheme with lower interest rates in order to help the people with lower incomes to sustain themselves during the lockdown in terms of liquidity.

    According to the scheme offered, the gold will be valued 10% more than the normal gold schemes, at Rs.3,300 per gram rather than Rs.3,000 per gram. The interest offered on the gold loan would be 6% per annum compared to the regular rate of 9.5% and the minimum amount that can be borrowed is Rs.25,000 and maximum is Rs.1 lakh. The repayment period will be 3 months and an additional grace period of 3 months.

    For the scheme, the processing fee would be 1% along with GST and the Prime Minister accidental insurance scheme with a cover of Rs.2 lakh will be given free of cost to the people opting for the scheme. According to a note issued from the bank, the scheme is being offered after understanding the problems faced by the people in terms of liquidity and money lenders who are charging very high interest rates.

    28 April 2020

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