A gold loan is a flexible financial instrument that meets a range of objectives, from supporting your foreign trips to handling unforeseen bills. Unlike other loans, which need a complicated approval procedure and a lot of paperwork, gold loans are convenient.
The documentation is minimal, the approval time is swift, and the disbursement of funds is quick. This makes gold loans an attractive option when you need funds urgently.
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What is a gold loan?
According to the Union Bank of India website, “A gold loan is a secured loan that allows you to leverage the value of your gold ornaments or jewelry to obtain funds. It’s a quick and hassle-free way to access liquidity while keeping your cherished possessions safe. Unlike unsecured loans, gold loans are backed by collateral, often leading to lower interest rates, making them an attractive option for borrowers.”Basic documents required for gold loan
Submit any one of the following:
- Passport (Not expired)
- Driving license (Not expired)
- Voters’ ID Card
- Aadhaar Card issued by UIDAI
- PAN (Permanent Account Number) Card (along with any of above mentioned documents) or Form 60
- One Passport Size Photograph
- Agri Allied Occupation Documentation( in case of bullet repayment for agriculture customers)
Gold loan tenure
Depending on the bank gold loan tenure varies. Gold loans is offered by banks for tenures starting from 6 months up to 42 monthsIn India, the interest rates on gold loans range from 8% to 26% annually. This rate is used to compute the principal and total interest. Over the course of their selected loan period, borrowers should repay interest in two ways: either in installments or all at once.
| Bank / NBFC | Gold Loan Interest Rate | Processing Fee |
| Kotak Mahindra Bank | 8.00% to 24.00% | Upto 2% + GST |
| HDFC Bank | 8.30% to 16.55% | 1% of disbursal amount |
| Central Bank of India | 8.45% to 8.55% | 0.50% of loan amount |
| Uco Bank | 8.50% | Rs.250 to 5000 max |
| Indian Bank | 8.65% to 9.00% | 0.56% of the limit sanctioned |
| Union Bank | 8.65% to 9.90% | |
| SBI | 8.70% | 0.50% + GST |
| Indusind Bank | 8.75% to 16.00% | 1% of loan amount |
| Bandhan Bank | 8.75% to 19.25% | 1% + GST |
| Punjab & Sind Bank | 8.85% | Rs.500 to 10000 max |
| Bank of Baroda | 9.15% | Applicable charges + GST |
| Punjab National Bank | 9.25% | 0.75% of loan amount |
| Bank of Maharashtra | 9.30% | Rs.500 to Rs.2000 + GST. |
| Federal Bank | 9.49% | |
| City Union Bank | 9.50% | Nil |
| Canara Bank | 9.60% | Rs.500 to Rs.5000 |
| J & K Bank | 10.00% | Rs 500 + GST |
| ICICI Bank | 10.00% | 1% of loan amount |
| Karur Vysya Bank | 10.25% | 0.50% (inclusive of Appraisal charges) |
| South Indian Bank | 10.01% | |
| Karnataka Bank | 11.21% | |
| Axis Bank | 17.00% | 0.5% + GST |
| Muthoot Finance | 22% p.a. with 2% rebate if 100% interest is paid monthly | |
| AU Small Finance Bank | Upto 24.00% | 1% + GST |
Source: Compiled by ETIG; interest rates as June, 2024.
