Multiple banks. Different interest rates. Call it a "conflict of interest".

    Gold Loan Interest rates

    What is a Gold Loan?

    Gold loan is a new and emerging concept in the banking industry. There are a lot of people who own gold jewellery or ornaments which are lying idle at home or in the bank vault. A gold loan basically helps you unlock the value of these precious metals by allowing you to avail a loan against them. The process of availing a gold loan is rather simple. You can approach any bank or non-banking company which provides a gold loan with your ornaments. The bank or lender will carry out a valuation of the ornaments and check them for purity, weight, etc. In some cases, you might also be required to show proof of your ownership of the gold ornaments being pledged by you. Once the ornaments have been verified, the loan amount will be sanctioned to you. Also, like any other type of loan, banks or lenders will only give you a loan which is up to 80% of the loan value.

    A gold loan or loan against gold could be compared to a personal loan, but usually does not carry any end-use restrictions. Also, the interest rates on loans against gold are comparatively lower than other types of loans. Gold loans are usually taken for shorter periods to fulfill immediate upcoming requirements like paying for a child’s education, planning a wedding, taking care of a medical emergency, etc. In India, there are many nationalized banks, private banks, public sector banks and other non-banking finance organizations which provide loans against gold at attractive rates.

    Advantages of a Gold Loan

    • Available To A Larger Number Of People – To avail a gold loan, applicants are usually not required to furnish any documentation like salary slips, certificates, credit history, bank statements, etc. Due to this reason, even non-working or unemployed individuals can apply and avail a loan against gold. Some banks or lenders may however require gold loan applicants to furnish a proof of ownership of the gold ornaments which they’re pledging.
    • No Extensive Documentation Required – Unlike other types of unsecured loans, a loan against gold does not require you to furnish extensive documentation for application. You will only be asked to provide basic documents for proof of identity and proof of residence to avail a gold loan.
    • Comparatively Lower Interest Rates – One of the most important advantages of a gold loan is the lower interest rate it is available at. While other types of loans like personal loans are normally available at interest rates ranging between 15% to 26%, a loan taken against gold, i=on the other hand, can be availed at a significantly lower interest rate ranging between 12% to 16%.
    • Simpler Alternative To A Personal Loan – A loan against gold or a gold loan is a fairly simpler alternative to taking a personal loan, especially in terms of documentation. For a gold loan, you only need to take your gold jewellery to the bank or lender, where it will be verified and valued, before the loan amount is sanctioned to you. With a gold loan, you can expect to get a loan amount which could be as high as up to 80% of the market value of the gold.
    • Repayment Options – Banks and lenders usually provide flexible repayments terms for loans taken against gold. Borrower will be given an option to pay only interest during the entire term and at the end of the tenure you can pay complete borrowed amount in single shot.
    • Quick Loan Processing & Loan Disbursal – Unlike other types of loans which usually have longer waiting periods between loan application and loan disbursal, loans against gold have a comparatively lesser wait period. In most cases, banks and lenders will approve and disburse the loan within a few hours or sooner, once the gold ornaments have been verified and undergone valuation for weight and purity. If you are looking to get a loan in the minimum possible time, a gold loan may be your best bet.

    What are the Banks Offering Gold Loans

    In India, there are many banks and non-banking companies which offer customers loans against gold. Most banks and lenders also offer multiple gold loan schemes to allow customers to avail gold loans as per their requirements. Some of the top banks which provide loans against gold are listed as follows:

    1. ICICI Bank – Provides gold loans under the EMI Scheme at an interest rate ranging between 12 % to 16.50%.
    2. State Bank of India – The nation’s largest public sector bank provides loans against gold at 2.50% above the base rate of 9.85%. The current rate of interest for loans against gold ornaments (demand loan) is 12.50%.
    3. Axis Bank – Provides loans against gold under the EMI Scheme and the Bullet Repayment Scheme. The bank provides loans against gold at interest rates between 14.50% up to 17 %.
    4. Muthoot Finance – One of the very first companies to introduce the facility of gold loans in India, Muthoot Finance provides multiple gold loan schemes with differing rates of interest and tenures. The interest rates for the various gold loan schemes range from between 12% and up to 24%, for loans featuring different time periods.
    5. Punjab National Bank – Provides gold loans under the Bullet Repayment Scheme, EMI Scheme and the Overdraft Scheme. The interest rates for this loan range between 11.10% to 12.10%.
    6. Manappuram Finance Limited – One of India’s highest credit rated companies, Manappuram Finance also offers customers a variety of gold loan schemes like the EMI scheme and Bullet Repayment Scheme. Interest rates for Manappuram Gold loans range between 12.00% to 26.00%.
    7. IndusInd Bank – Provides gold loans against gold at interest rates ranging between 13.50% to 15.50%.
    8. Canara Bank – Canara Bank offers the Swarna Loan (loan against gold) to its customers under the Bullet Repayment Scheme at 3.10% above the base rate of 9.65%. The applicable interest rate is 12.75%.
    9. HDFC Bank – Offers the Sampoorna Bharosa gold loan, a highly affordable gold loan which can be availed at any HDFC bank branch. This gold loan comes with very convenient terms and is offered at an interest rate ranging between 6.70% to 15.65%.
    10. Federal Bank – Offers two different types of gold loans under the Overdraft Scheme and the Bullet Repayment scheme. The interest rates applicable on these gold loans range between 13.00% to 13.50%.

    Gold Loan Interest rates

    Bank Name Gold Loan Interest Rates
    ICICI Bank 12 % to 16.50 %
    State Bank of India 12.50 %
    Muthoot Finance Limited 12 % to 24 %
    Axis Bank 14.50 % to 17 %
    Punjab National Bank 11.10 % to 12.10 %
    Manappuram Finance Limited 12 % to 26 %
    IndusInd Bank 13.50 % to 15.50 %
    Canara Bank 12.75 %
    HDFC Bank 6.70 % to 15.65 %
    Federal Bank 13 % to 13.50 %

    Gold Loan Calculator

    With the host of features and advantages they have over other types of loans, loans against gold can be an ideal alternative to finance your needs. Gold loans can help you obtain easy finance to take care of needs like child’s tuition fee, emergency medical need, and down payment for a vehicle or house, financing a wedding or any other immediate need. Also, applying and getting a loan against gold is far simpler as compared to other kinds of loans which require extensive documentation.

    Gold loans can provide you with loan amounts as high as 80% of the value of the gold. However, if you wish to find out how much you’re gold loan may cost you, a gold loan EMI calculator can help you in this regard. With this tool, you can easily get the amount you will be required to pay each month towards your gold loan. This way you can compare gold loans being offered by various banks and lenders before arriving at a decision. A gold loan EMI calculator is fairly simple to use. a standard gold loan EMI calculator will ask you to input details like the amount of loan you wish to take, the rate of interest applicable on the loan, the duration for which you wish to take the loan and the number of EMIs you wish to pay off the loan in. Once all this information has been input, the calculator will automatically display the amount of EMI which you will have to pay for the duration of the loan, in order to repay it fully.


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