Gold loans have grown in popularity due to its numerous perks. With a gold loan, which is a secured loan, you can use the value of your gold jewelry or ornaments as collateral to get money. It’s an easy and quick option to obtain liquidity without sacrificing the security of your priceless belongings. Gold loans, in contrast to unsecured loans, are secured by collateral and frequently have lower interest rates, which makes them a desirable choice for borrowers.
Gold evaluation
According to the Bank of Baroda website, “Once you have chosen your preferred lender, you must get your gold evaluated. Different lenders offer different evaluation options. You can visit the lender’s branch for evaluation. An Assayer weighs the gold and conducts the KYC process. The lender then informs you of the loan amount you can get, the interest rate applicable on the loan, and the repayment terms. Lenders determine the gold value by taking the average of one gram gold price for one month.”
No need for credit score
When you apply for a Gold Loan, the only requirement is that you must have gold—coins, jewelry, etc.—in your possession. Even if you have a bad credit score, you can still get the loan. In actuality, a large number of Gold Loan providers do not require credit scores, which adds to the loans’ enormous appeal.
Documents
The documentation process to avail a Gold Loan is not as stringent as a Personal Loan. You are only required to produce the KYC documents. You do not need to provide an income proof; in case you apply with ICICI Bank.
Latest gold loan interest rates
Banks offer different repayment options to gold loan customers.
| Bank / NBFC | Gold Loan Interest Rate | Processing Fee | Last Update |
| Kotak Mahindra Bank | 8.00% to 24.00% | Upto 2% + GST | 11/2/2023 |
| HDFC Bank | 8.30% to 16.55% | 1% of disbursal amount | 11/2/2023 |
| Central Bank of India | 8.45% to 8.55% | 0.50% of loan amount | 11/2/2023 |
| Uco Bank | 8.50% | Rs.250 to 5000 max | 11/2/2023 |
| Indian Bank | 8.65% to 9.00% | 0.56% of the limit sanctioned | 11/2/2023 |
| Union Bank | 8.65% to 9.90% | 11/2/2023 | |
| SBI | 8.70% | 0.50% + GST | 11/2/2023 |
| Indusind Bank | 8.75% to 16.00% | 1% of loan amount | 11/2/2023 |
| Bandhan Bank | 8.75% to 19.25% | 1% + GST | 11/2/2023 |
| Punjab & Sind Bank | 8.85% | Rs.500 to 10000 max | 11/2/2023 |
| Bank of Baroda | 9.15% | Applicable charges + GST | 11/2/2023 |
| Punjab National Bank | 9.25% | 0.75% of loan amount | 11/2/2023 |
| Bank of Maharashtra | 9.30% | Rs.500 to Rs.2000 + GST. | 11/2/2023 |
| Federal Bank | 9.49% | 11/2/2023 | |
| City Union Bank | 9.50% | Nil | 11/2/2023 |
| Canara Bank | 9.60% | Rs.500 to Rs.5000 | 11/2/2023 |
| J & K Bank | 10.00% | Rs 500 + GST | 11/2/2023 |
| ICICI Bank | 10.00% | 1% of loan amount | 11/2/2023 |
| Karur Vysya Bank | 10.25% | 0.50% (inclusive of Appraisal charges) | 11/2/2023 |
| South Indian Bank | 10.01% | 11/2/2023 | |
| Karnataka Bank | 11.21% | 11/2/2023 | |
| Axis Bank | 17.00% | 0.5% + GST | 11/2/2023 |
| Muthoot Finance | 22% p.a. with 2% rebate if 100% interest is paid monthly | 11/2/2023 | |
| AU Small Finance Bank | Upto 24.00% | 1% + GST | 11/2/2023 |
Source: Compiled by ETIG; interest rates as August 14, 2024.
Repayment Mode
Gold Loan (EMI based): Repayment of Principal and Interest will commence from month following the month of disbursement.
3 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
6 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
12 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
