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The interest rates on gold loan, availed by pledging gold, are relatively lower than other types of loans and range between 7.35% to 29% p.a. Banks and other financial institutions in India offer gold loans, the loan amount for which ranges from Rs.1500 to Rs.1.5 crore. The repayment tenure of these gold loans ranges between 7 days to 240 months.
|Interest Rate||7.35% p.a. onwards|
|Loan Amount||Up to Rs.1 crore|
|Loan Tenure||Up to 20 years|
|Processing Fee||0.5% the loan amount + GST onwards|
|Name of the Bank||Interest Rate||Loan Amount|
|Axis Bank Gold Loan||13.50% p.a.to 16.95% p.a.||Rs.25,001 to Rs.25 lakh|
|HDFC Gold Loan||11% p.a. to 16% p.a.||Rs.10,000 onwards|
|Canara Bank Gold Loan||7.35% p.a.||Rs.5,000 to Rs.35 lakh|
|Muthoot Gold Loan||12% p.a. to 26% p.a.||Rs.1,500 onwards|
|SBI Gold Loan||7.00% p.a. onwards||Rs.20,000 to Rs.50 lakh|
|Kotak Mahindra Gold Loan||10.00% p.a. - 17.00% p.a.||Rs.20,000 to Rs.1.5 crore|
|IndusInd Bank Gold Loan||11.50% p.a. - 16.00% p.a.||Up to Rs.10 lakh|
|Manappuram Gold Loan||9.90% p.a. to 24.00% p.a.||As per the requirement of the scheme|
|Bank of Maharashtra Gold Loan||7.10% p.a.||Up to Rs.20 lakh|
|PNB Gold Loan||7.70% p.a. to 8.75% p.a.||Rs.25,000 to Rs.10 lakh|
|Bank of Baroda Gold Loan||8.85% p.a. onwards||Up to Rs.50 lakh|
*Repayment tenure has been taken as 6 months taking the purity of gold as 22k.
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.
Some of the main benefits of availing a gold loan are mentioned below:
Some of the main features of a gold loan are mentioned below:
Several lenders provide you loans on pledging gold at attractive interest rates. The loan amount varies based on the weight of gold that you pledge. The loan amount per gram is a figure that varies across banks.
If the price of gold is high in the market, the value of the gold ornaments or coins being pledged by you will also be high. Lenders will offer you a lower interest rate in such cases since the risk associated is low and if ,for some reason, you are unable to make the equated monthly instalments (EMIs), the lender can easily recover the outstanding amount by selling/auctioning the gold ornaments.
If the rate of inflation is high, the value of currency depreciates and hence, people tend to accumulate more gold. Gold acts as a hedge against inflationary conditions especially when they persist for a longer period. This, in turn, pushes the prices of gold higher and in such time if you wish to avail a gold loan, you may get lower interest rates from lenders.
Most lenders offer gold loans to their existing customers, though, in some cases, individuals who have no history with the bank can also avail gold loans. However, existing customers of banks/lending institutions are typically in a better position to negotiate for a lower interest rate.
The interest rate on gold loans will vary depending on the kind and purity of the gold ornaments you pledge. The purity of gold will also affect the amount of loan sanctioned by the lender. To avail a gold loan, the gold ornaments should be in the karat range of 18k to 24k which will be verified by the jewelry appraiser in the bank. If the gold ornaments are studded with precious stones, the weight of the latter will be excluded from the calculations.
No, lenders will not take into account your credit score when you apply for a gold loan. If you are above 18 years of age and have documents to prove your ownership of the gold, you can apply for a gold loan.
Yes. Since agriculture falls under the priority sector, farmers who wish to avail gold loans to fund their agriculture infrastructure or to meet their other farming-related activities, can get a rebate on the interest rates. The rebate can range between 1% and 2% and hence, they can get gold loans at an interest rate as low as 8%.
You can choose to repay your gold loan either by cash, funds transfer, demand draft (DD), or cheque.
You can calculate the gold loan interest amount by reducing the principal amount from the balance that is outstanding.
Indian citizens who are between the ages of 21 years and 60 years and are farmers, business individuals, salaried employees, and self-employed individuals can avail a gold loan. Certain lenders may provide gold loans to housewives and pensioners as well.
Most lenders will offer the facility of part-prepayment but may charge a penalty. Ensure that you check for the charges before you decide to make a part-payment on your gold loan. However, to get your gold ornaments back, you will have to repay the entire outstanding amount. Having said that, there are some lenders who will be ready to release a part of your gold ornaments, in case you need it.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
The Punjab National Bank (PNB) announced on 13 October 2021 that the rate of interest on loans against Sovereign Gold Bond (SGB) and against gold jewellery has been reduced by 1.45% points, as a part of the bank's festive offers.
As per the bank statement, the bank is now offering loans against gold jewellery at 7.30% and loans against SGB at 7.20% after interest rate revisions.
The home loans offered by PNB can now be availed at 6.60% and car loans at 7.15%. The bank is also waiving off processing fees on loans against SGB and gold jewellery, similar to vehicle loans and home loans announced recently.
14 October 2021
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