Short term money crises can be a nightmare as one has very few options like credit cards, personal loan or gold loans for financing.
Opting for gold loans is a much better option as compared to credit cards and personal loans which carry a higher rate of interest.
Here is the list of best bank for gold loan in India.
Best Gold Loan Interest Rates Comparison
| HDFC Bank | 9.95% to 16.05% |
| Axis Bank | 15% to 17.5% |
| State Bank of India | 9.75% |
| Manappuram Finance | 14% to 26% |
| Muthoot Finance | 12% to 27% |
| ICICI Bank | 10% to 16.70% |
| Punjab National Bank | 10.05% to 11.05% |
| Yes Bank | 10.75% to 15.50% |
| Federal Bank | 9.80% to 13.25% |
| Andhra Bank | 10.75% |
| IIFL | 9.24% to 24% |
Best Gold Loan in India 2020
#1. HDFC Bank Gold Loan
You can take a loan starting from Rs. 25,000 and above. The gold loan from HDFC Bank is in the form of a term loan, overdraft or based on EMI.
You need minimal KYC documents and your HDFC gold loan gets disbursed in 45 to 60 minutes.
9.95% to 16.05%
Tenure – 6 months to 48 months
Loan processing fee – 1.5% of the loan amount
Late payment charges – 2% p.m.
Foreclosure charges – 2% of the outstanding amount if closed within 3 months. 1% if closed within 6 months
- Quick processing and disbursal
- Period up to 48 months
- 1.5% processing charges
- Up to 2% foreclosure charges
#2. Axis Bank Gold Loan
Axis gold loan amount starts from Rs. 25,001 to Rs. 20 Lacs with same day loan disbursal. You can make the application online, on the phone or by visiting the branch.
15% to 17.5% p.a.
Tenure – 6 months to 36 months
Loan processing fee – 1% of the loan amount
Late payment charges – 2% p.m
Part payment/ Foreclosure charges – NIL.
But the minimum part payment amount is Rs. 10,000.
- NIL part payment charges
- Higher rate of interest
- 1% processing charges
#3. State Bank of India Gold Loan
The gold loan from SBI starts from Rs. 20,000 to a maximum of Rs. 20 Lacs. You can take three types of gold loans, the details of which are as under
| Details | Gold Loan | Liquid Gold Loan |
Bullet Repayment Gold Loan |
| Repayment | EMI | Overdraft | Bullet payment |
| Maximum Tenure | 36 months | 36 months | 12 months |
| Margin | 25% | 25% | 35% |
1-Year MCLR + 1.25%
Present the 1-year MCLR is at 8.50%. Hence, gold loan interest rate is 8.50 + 1.25 = 9.75%.
Loan processing fee – 0.5% of the loan amount, Minimum Rs. 500
Prepayment / Foreclosure charges – NIL.
- Lowest interest rate of 9.75%
- NIL part payment charges
- 65% LTV for bullet repayment loans
#4. Manappuram Finance Gold Loan
You can get the loan processed at your home by Manappuram finance offers doorstep gold loan service.
The gold loan application can also be made online, after depositing gold and obtaining a ticket from the nearby branch.
The NBFC has a wide range of gold loan schemes for loan amount starting from 1000 rupees to Rs. 1.5 Crores. The best part is the NIL loan prepayment penalty.
However, The drawback is that most of the schemes have a maximum tenure of 90 days.
14% to 26%
Tenure – 3 months to 12 months
Loan processing fee – Rs. 10 charged at the time of settlement
Late payment charges – 3% p.m
Part payment/ Foreclosure charges – NIL.
- Loan ranges from Rs. 1000 to Rs. 1.5 crores
- NIL prepayment penalty
- Low loan processing fees
- Most of the schemes have 90 days tenure
- Higher rate of interest
- 3% p.m. late payment charges
#5. Muthoot Finance Gold Loan
Muthoot Finance offers gold loans through various schemes for a loan amount ranging from Rs. 1500 to no upper limit depending on the collateral offered.
Most of the gold loan schemes have a tenure less than 360 days but the good thing is that there is no prepayment penalty.
12% to 27%
Tenure – 30 days to 3 years maximum schemes are for less than 360 days
Loan processing fee – Rs. 50 to 1% depending on the loan scheme
Prepayment/ Foreclosure charges – NIL
- Loan ranges from Rs. 1500 with no upper limit
- NIL prepayment penalty
- Most of the schemes have less than 360 days of tenure
- A higher rate of interest
#6. ICICI Bank Gold Loan
You can choose has two gold loan schemes of 6 months and 12 months from ICICI bank. The loan amount can rang from Rs. 10,000 to Rs. 15 Lacs.
You would get free gifts from brands like Provogue, Elfin watch or Lee Cooper Bag on applying for a loan over Rs. 1 Lakh.
You can apply by visiting branch, online mode and also by giving a missed call on 84448 84448.
10% to 16.70%
Tenure – 6 months and 12 months
Loan processing fee – 1% of the loan amount
Late payment charges – 6% p.a. over and above the normal rate of interest
Prepayment/ Foreclosure charges – 1% if closed within 11 months for a 12-month scheme or 5 months for a 6-month scheme
- Free gift on loan availment
- Application through missed call
- 6 and 12 months fixed tenure schemes
- 1% foreclosure charges
#7. Punjab National Bank Gold Loan
PNB offers gold loan without any loan upper limit for productive purposes like agricultural/ allied and other activities.
For non-productive purposes like medical, marriage, education purpose loan or other purposes the bank limits the maximum amount of loan to Rs. 10 Lacs.
PNB has 25% margin for loans with payment of interest as and when levied option and 35% for bullet payment option.
For agriculture – MCLR + 1.6% i.e. 8.45% + 1.6% = 10.05%
For others – MCLR + 2.6% i.e. 8.45% + 2.6% = 11.05%
Tenure – 12 months
Loan processing fee – 0.25% of the loan amount
Prepayment/ Foreclosure charges – NIL
- NIL prepayment charges
- 1% concessional rate for agriculture activity
- NO upper loan amount for agricultural activities
- A lower rate of interest
- Maximum tenure of 12 month
- LTV of 65% for bullet repayment option
#8. Yes Bank Gold Loan
From Yes bank you can take gold loans for an amount starting from Rs. 25000 to Rs. 50 Lacs with a maximum tenure of 36 months.
The gold loans are available on 18 to 22-carat gold and even on gold coins with a maximum weight of 50 grams.
Yes Bank grants 1 minute in principle approval for online applications.
10.75% to 15.50%
Tenure – 6 months to 36 months
Loan processing fee – 0.75% to 1% of the loan amount
Prepayment/ Foreclosure charges – 0.5% if prepaid before 6 months
- 1 minute in principal approval
- Higher loan amount
- 0.5% foreclosure charges
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#9. Federal Bank Gold Loan
Federal bank gives gold loans for personal, business and agricultural purposes. The minimum loan amount Rs. 1000 with the maximum amount being Rs. 1.5 Crores.
Agri gold loans carry an LTV of 82% of the market value of Gold. For other gold loans, the LTV is 75% of the market value of gold.
Gold loan for Agriculture Purposes – 9.80% to 11.50%
Gold loan for Others 13.25%
Tenure – 6 months to 12 months
Loan processing fee – NIL
Prepayment/ Foreclosure charges – NIL
- NIL processing and foreclosure charges
- Higher loan amount of 1.5 Crores
- 82% LTV for Agri loans
- Max tenure of 12 months
#10. Andhra Bank Gold Loan
The best part of a gold loan from Andhra bank is the NIL processing or foreclosure charges but the banks do charge an appraising fee of up to 1%.
The gold loans are available for personal use or business purposes.
MCLR + 2% i.e. 8.75% + 2 = 10.75% irrespective of loan amount or period
Tenure – 3 months to 12 months
Loan processing fee – NIL
Appraising charges – For loan amount up to Rs. 2 Lacs – 1% of the loan amount
For loan amount > Rs. 2 Lacs – 0.75% of loan amount.
Prepayment/ Foreclosure charges – NIL
- NIL processing and foreclosure charges
- Lower rate of interest
- Up to 1% appraising charges
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#11.IIFL Gold Loan
IIFL offers gold loans starting from Rs. 3000. IIFL gives approval in 5 minutes and disbursal happens in 30 minutes.
The gold loan has multiple repayment options including repayment via mobile apps.
Starting from 9.24% to 24% p.a.
Tenure – 3 to 11 months
Loan processing fee – Rs. 0 onwards depending on schemes
Mark to Market Charges – Rs. 500
Prepayment/ Foreclosure charges – Maximum Rs. 150 if closed within 3 months after that no charges
- NIL foreclosure charges after 3 months
- Repayment from mobile app also
- Maximum 11 months loan period
- 500 rupees of MTM Charges
Best Gold Loan Company in India
#1. State Bank of India
SBI has widest network and branch coverage.
The gold loan at SBI has one of the lowest interest rates at MCLR + 1.25%, presently at 9.75% p.a. with tenures up to 36 months and NIL prepayment charges.
#2. HDFC Bank
The gold loan from HDFC Bank has the longest tenure of 48 months. The bank processes loan within 60 minutes and require minimal documents.
HDFC Bank gold loan is in the form of a term loan, overdraft or based on EMI with interest rates starting from 9.95%.
#3. Federal Bank
Unlike other banks, Federal Bank has the highest LTV of 82% and the lowest interest rate of 9.80% for Agri gold loans. For other loans, the interest rate is capped at 13.25%.
Federal bank offers loan amount from Rs. 1000 to Rs. 1.5 Crores for personal, business and agricultural purposes.
#4. Andhra Bank
Andhra Bank offers a fixed interest rate of MCLR + 2% (presently 10.75%) irrespective of gold loan amount or period.
The gold loans come with NIL processing or foreclosure charges and are available for personal use or business purposes.
#5. Muthoot Finance
Muthoot Finance offers gold loans starting from Rs. 1500 to no upper limit.
The gold loan schemes to have tenure ranging from 30 days to 3 years. Most of the schemes have less than 360 days of tenure.
Things You Should Consider While Having a Gold Loan
- Gold Loans are for Short Term
- Rate of Interest
- Valuation of Gold
- Margin or Loan to Value (LTV)
- Form and Purity of Gold
- Not Every Jewelry is Eligible for Loan
- Repayment Conditions
Gold Loans are for Short Term
Gold loans have tenure in the range of 3 months to 36 months. Gold loans can tide your financial crises for a maximum period of 3 years only.
Be doubly sure that you are able to repay within the timeframe else your gold can get auctioned. Hence, the gold loan should not be used for speculation or other risky purposes where repayment can be in doubt.
Rate of Interest
The rate of interest on the gold loan varies from banks to banks, typically interest rate starts from 10% and goes as high as 24%.
Valuation of Gold
Rate per gram or valuation method affects the loan amount. Some banks consider the average of the last two weeks gold price to arrive at the rate per gram. While others prefer the daily rate for valuing gold.
Prior information on the valuation method adopted by the banks can help you get more loan amount.
Margin or Loan to Value (LTV)
The banks will not finance 100% of the gold jewelry value. The loan amount you will get is 75% of the entire value of gold.
Form and Purity of Gold
Banks accept gold with a purity level of 18 carats and above with the higher purity gold getting a higher rate per grams.
Banks prefer gold ornaments over coins because of attached sentiments which ensures timely or early repayment. Further, the gold coins should be of 99.99% purity with weight not exceeding 50 grams.
Not Every Jewelry is Eligible for Loan
Not all jewelry can be pledged for a gold loan. Precious gems and stones studded in the gold ornaments are not valued and are not considered for gold loans.
Banks do not offer gold loan on gold bars or gold bullions. Further, gold bonds or gold ETFs are also not considered for gold loans.
Repayment Conditions
Gold loans have flexible repayment options. Some banks allow payment of only interest with an option to repay the principal at the end.
Others structure repayment in the form of EMI or bullet repayment. In bullet repayment, you repay all the interest and principal at the maturity.
Factors Affecting Gold Loan Interest Rate
- Loan Amount
- Loan to Value Ratio (LTV)
- Relationship with the Bank
- Tenure of the Loan
- Inflation
Loan Amount
In case of gold loans repayment capacity is not the key factor but the value of gold is. Which in turn is dependent on the purity level of the gold.
The higher loan amount comes with a lower interest rate and the interest rates are higher for small gold loan amounts.
Loan to Value Ratio (LTV)
A gold loan with higher LTV will attract more interest rate when compared to the loan with lower LTV. Reason being the higher amount of the loan per gram of gold.
Lower LTV results in the lower loan amount or pledging of more gold, hence the lower interest rates.
Relationship with the Bank
Banks charge a lower rate of interest on gold loans for existing customers with healthy relationships in the past having no defaults and overdrafts.
Maintaining good relationships becomes handy where you can bargain better rates and also helps in smooth processing and quick disbursal.
Tenure of the Loan
The gold loan comes with tenure ranging from 3 months to 36 months. Lower tenure gold loans attract higher interest rates whereas longer period gold loans have lesser interest rates.
Inflation
Higher inflation results in the reduced purchasing power of the money. In order to compensate for the decrease, banks charge a higher interest rate on the gold loan.
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