Are you thinking Which bank is best for a gold loan?’ Whether it is for quick funds or emergencies or to make the most of your valuable assets, finding the “Best bank for gold loan” is crucial.
Gold loans have gained popularity as a quick and hassle-free way to access funds in times of need. These are secured loans that use your gold ornaments or coins as collateral.
In this guide, we’ll explore the banks that offer low-interest online gold loans, the best gold loan schemes, and where you can find the cheapest gold loan rates.
Features of a Gold Loan
Gold loans are a popular type of secured loan in India. They are offered by banks and non-banking financial companies (NBFCs) against gold pledged as collateral. Gold loans are typically easy to get, even for borrowers with bad credit or no credit history.
Here are some of the key features of gold loans in India:
- Loan amount: Gold loans can be availed for amounts up to Rs. 50 lakh, depending on the value of the gold pledged.
- Loan tenure: The loan tenure for gold loans typically ranges from 3 months to 4 years.
- Interest rates: gold loan interest rates are typically higher than other types of loans, such as personal loans or credit card loans.
- Repayment: Gold loans can be repaid in monthly installments or in a lump sum at the end of the loan tenure.
- Prepayment: Most banks and NBFCs allow borrowers to prepay their gold loans without any penalty charges.
- Gold purity: Gold loans are typically offered on gold with a purity of 22 carats or above.
- Quick and easy processing: Gold loans are typically processed quickly and easily, with borrowers being able to get the loan amount within a few hours or days of pledging the gold.
- No credit history required: Gold loans do not require borrowers to have a good credit history, making them a good option for borrowers with bad credit or no credit history at all.
- Flexible repayment options: Gold loans offer flexible repayment options, with borrowers being able to choose to repay the loan in monthly installments or in a lump sum at the end of the loan tenure.
- Anytime liquidity: Gold loans can be availed and repaid at any time, giving borrowers access to quick cash whenever they need it.
Gold Loan Interest Rates of Top Banks & NBFCs
Securing a gold loan can be a smart financial move, providing you with quick access to funds while leveraging your gold assets. To help you make an informed decision and find the best gold loan offers, we present the Gold Loan Interest Rates Table:
| S.No. | Bank | Interest Rates | Loan Amount |
| 1. | State Bank of India | 7.50% p.a. onwards | Rs.20,000 to Rs.50 lakh |
| 2. | HDFC Bank | 7.60% to 17.05% p.a. | Rs.10,000 onwards |
| 3. | Kotak Mahindra Bank | 8.00% to 17.00% p.a. | Rs.20,000 to Rs.1.5 crore |
| 4. | Central Bank of India | 8.10% to 8.20% p.a | Rs.1,000 onwards |
| 5. | Indian Bank | Around 7.00% | Rs.1,000 onwards |
| 6. | ICICI Bank | 8.99% to 17.99% p.a. | Rs.10,000 onwards |
| 7. | Axis Bank | 11.99% p.a. onwards | Rs.25,001 to Rs.25 lakh |
| 8. | Canara Bank | 9.60% p.a. | Rs.5,000 to Rs.35 lakh |
| 9. | Bank of Baroda | 9.15% p.a. onwards | Up to Rs.50 lakh |
| 10. | Punjab National Bank | 8.10% to 9.25% p.a. | Rs.25,000 to Rs.25 lakh |
Note
The interest rates are dynamic and subject to change based on your credit history and creditworthiness.
Whether you’re seeking the lowest interest rate for a gold loan or the best gold loan scheme that suits your requirements, this table serves as a valuable resource to guide you in your financial endeavors.
Let’s look at some of India’s top NBFC’s interest rates and the range of loan amounts we can avail:
| S.No. | NBFC | Interest Rates | Loan Amount |
| 1. | Muthoot Finance | 10.50% to 22.00% p.a. | Rs.1,500 onwards |
| 2. | Manappuram Finance | 9.90% to 26.00% p.a. | Rs.10,000 onwards |
| 3. | Bajaj Finance | 14.00% to 26.00% p.a. | Rs.15,000 onwards |
| 4. | IIFL Finance | 12.00% to 14.00% p.a. | Rs.10,000 onwards |
| 5. | Union Gold Loan | 10.50% to 18.50% p.a. | Rs.10,000 onwards |
Note: The interest rates and other terms and conditions may vary. It is always advisable to compare offers from multiple Banks/ NBFCs before choosing a gold loan.
Foreclosure Charges
Foreclosure charges on a gold loan are the charges that a lender may levy on a borrower if they prepay their loan before the maturity date.
- Gold loans are typically secured against gold pledged as collateral.
When a borrower prepays their gold loan, the lender releases the pledged gold. - Foreclosure charges are typically expressed as a percentage of the outstanding loan amount. The percentage may vary depending on the lender and the terms of the loan agreement.
- Some lenders may not levy any foreclosure charges at all, while others may charge up to 2% of the outstanding loan amount.
| S.No. | Banks/ NBFC | Foreclosure Charges |
| 1. | State Bank of India | Nil |
| 2. | HDFC Bank | Nil |
| 3. | Kotak Mahindra Bank | 1% of the outstanding loan amount |
| 4. | Central Bank of India | Nil |
| 5. | Indian Bank | Nil |
| 6. | ICICI Bank | 1% of the outstanding loan amount |
| 7. | Axis Bank | 1% of the outstanding loan amount |
| 8. | Canara Bank | Nil |
| 9. | Bank of Baroda | Nil |
| 10. | Punjab National Bank | Nil |
| 11. | Muthoot Finance | 1% of the outstanding loan amount |
| 12. | Manappuram Finance | 1% of the outstanding loan amount |
It is important to note that foreclosure charges are not the only cost associated with prepaying a gold loan. Borrowers may also have to pay interest on the loan amount for the period between the prepayment date and the scheduled repayment date
Also Read: Want to Apply for a Gold Loan? Know Its Benefits!
Finding the Cheapest Gold Loan
To find the cheapest gold loan, it’s essential to compare interest rates, processing fees, and other charges across different banks and NBFCs. Additionally, consider the following tips:
- Loan-to-Value (LTV) Ratio: The LTV ratio determines how much loan you can get against the value of your gold. Higher LTV ratios can help you get more money for your gold.
- Loan Tenure: Choose a loan tenure that suits your repayment capacity. Longer tenures may have lower EMI but can result in higher interest payments over time.
- Repayment Options: Look for banks that offer flexible repayment options, including interest-only payments or bullet repayments, to match your financial situation.
- Processing Time: Quick loan processing can be crucial in emergencies. Check the processing time of different lenders.
- Documentation: Opt for lenders with minimal documentation requirements to simplify the application process.
- Customer Service: Good customer service can make your gold loan experience smoother. Read reviews and ask for recommendations.
Also Read: Invest in the Best Gold Stocks in India
When it comes to finding the best banks for gold loans with low interest rates, there are several options to choose from. HDFC Bank, ICICI Bank, SBI, Axis Bank, and various NBFCs like Muthoot Finance and Manappuram Finance offer competitive rates and flexible terms. To get the cheapest gold loan, carefully compare interest rates, fees, and repayment options.
Remember to read the fine print, and don’t hesitate to ask questions to ensure you make an informed decision that suits your financial needs. With the right choice, you can unlock the value of your gold assets while keeping interest costs to a minimum.
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Frequently Asked Questions
Q.What bank is the best to get gold loan?
A. The best bank to get a gold loan can vary depending on your location, loan requirements, and preferences. Some reputable banks known for gold loans include HDFC Bank, State Bank of India (SBI), ICICI Bank, and Muthoot Finance.
Q. What is the maximum amount of loan that can be availed?
A. The maximum amount of loan that can be availed through a gold loan typically depends on the value and purity of the gold you pledge as collateral, as well as the lender’s policies.
Q. What is the repayment tenure for gold loans?
A. Repayment tenures for gold loans are typically shorter than other types of loans, often ranging from a few months to a few years.
Q. What are the interest rates for gold loans?
A. Interest rates for gold loans can vary among lenders and are influenced by factors such as loan-to-value ratio, loan amount, and prevailing market conditions.
Q. What are the documents required to avail a gold loan?
A. Identity Proof,Address Proof,Passport-sized photographs, Gold Ownership Proof,Gold Purity Certificate,Ornament Evaluation
Q. Which banks offer the best interest rates on gold loans?
A. Some banks in India known for competitive gold loan interest rates included HDFC Bank, SBI, and ICICI Bank.
