Looking for immediate cash to meet an emergency expense? Taking a gold loan may be a smart choice to cover your short-term financial needs.

You can quickly apply for a gold loan at your bank or any other gold loan provider near you by pledging gold ornaments or jewellery. Gold loans are secured, and the gold ornament or jewellery acts as collateral. Generally, most lenders provide gold loans up to 75% of the market value of the pledged ornaments.

So, if you need quick cash to meet a family or personal emergency, gold loans are an excellent choice. This guide lists the top 5 gold loan lenders in India who offer the lowest interest rates on gold loans. Compare the features of gold loans at popular lenders and choose the best offer for you.

Top 5 Public Sector Banks offering the Lowest Interest Rates on Gold Loans for 2021

S.No. Bank Name Gold Loan Interest Rate
1 Punjab & Sind Bank Starts from 7.00%
2 Bank of India •        For agriculture purposes – 7.30%

•        For retail/consumption purposes – 8.45%

3 Canara Bank Starts from 7.35%
4 SBI Starts from 7.50%
5 Union Bank of India •        For agriculture purposes – MCLR + 0.50%

•        For retail/consumption purposes – MCLR + 1.00%

*Make sure to check the corresponding bank website for the latest interest rates.

Top 5 Private Sector Banks offering the Lowest Interest Rates on Gold Loans for 2021

S.No. Bank Name Gold Loan Interest Rate
1 Federal Bank Starts from 8.50%
2 HDFC Bank Starts from 8.85%
3 ICICI Bank Starts from 9.00%
4

 

Karur Vysya Bank •        For agricultural purposes – starts from 8.60%

•        For non-agri purposes – starts from 9.60%

5 Dhanlaxmi Bank 9.65% (fixed)

*Make sure to check the corresponding bank website for the latest interest rates.

 

Top 5 Gold Loan Companies offering the Lowest Interest Rates on Gold Loans for 2021

S.No. Gold Loan Company Gold Loan Interest Rate
1 IIFL Finance Starts from 9.48%
2 Bajaj Finance Starts from 11%
3 Shriram Finance Starts from 11.5%
4 Muthoot Finance Starts from 12%
5 Manappuram Finance Starts from 12%

*Make sure to check the corresponding gold loan company’s website for the latest interest rates.

The Rising Demand for Gold Loans amidst the Pandemic

Gold loans have seen a considerable rise in demand amid the Covid-19 pandemic. Many small business owners and families who have been affected financially by the pandemic have resorted to gold loans to meet various cash needs.

The biggest draw of gold loans is that lenders do not evaluate the applicant’s credit score and history or repayment capacity, unlike other loans like a personal loan. This makes it easy for borrowers to qualify easily for gold loans.

To take a gold bank loans, all that a borrower has to do is pledge gold ornaments and walk away with immediate cash. The gold jewellery you commit is held by the bank/NBFC as security and is returned to you once you have repaid the loan amount in full.

  • Easy eligibility
  • Quick disbursal
  • Ready availability

Make gold loans the popular choice for emergency needs in India.

Who is the best lender for gold loans in India?

Gold loans in India are offered by both banks (public and private sector) and non-banking financial companies. Some popular banks that offer gold loans include SBI, ICICI Bank, HDFC Bank, Canara Bank, Union Bank of India and more. The top gold loan NBFCs include Manappuram Finance, Muthoot Finance, Bajaj Finance, Shriram Finance and IIFL Finance.

When it comes to choosing the best lender for gold loans, you have to consider five key factors:

  • Interest Rates
  • Processing Fees
  • Tenure
  • Loan Amount
  • Ease of Loan Application and Time for Disbursal

For the latest interest rates, refer to the tables above. The processing fees are the one-time fee charged and is usually a percentage of the loan amount borrowed. The loan period’s tenure ranges from a few months to a few years, depending on the lender and the gold loan scheme.

The Gold bank loans amount is dependent on the value of the pledged gold ornaments. First, lenders evaluate the purity of the gold ornaments. Then they offer up to a maximum of 70% of the market value of the gold as the loan.

The final factor you have to consider is the ease of the loan process. Look for lenders who offer you a digital application process and instant loan sanction. Some lenders like Muthoot Gold Finance offer in-house gold evaluation, making it easy for borrowers to get gold loans.

Quick Comparison of Top Gold Loan Lenders in India

Gold Loan Lender Interest Rate (%) Processing Fee (% of Loan Amount) Available Loan Amount Loan Tenure
Punjab & Sind Bank Starts from 7.00% •        Rs. 500 for loans up to Rs. 2 lakhs

•        0.50% of the loan amount for loans above Rs. 2 lakhs

Rs. 10,000 to Rs. 25 lakhs Up to 1 year
Bank of India 7.30% to 8.45% Nil for loans less than Rs. 1 lakh

For loans above Rs. 1 lakh – the maximum fee is Rs. 1500

Maximum of Rs. 50 lakhs Up to 1 year
Canara Bank 7.35% 0.50% of the loan amount Rs. 5000 to Rs. 20 lakhs Up to 1 year
SBI 7.50% 0.50% of the loan amount + GST Rs. 20,000 to Rs. 50 lakhs 12 to 36 months
HDFC Bank Starts from 8.85% 1% of the loan amount Starts from Rs. 25,000 (Rs. 10,000 in rural markets) 3 months to 24 months
ICICI Bank Starts from 9.00% 1.0% Rs. 10,000 to Rs. 1 crore 6 to 12 months
Karur Vysya Bank Starts from 8.60% 0.50% Minimum loan amount – Rs. 5000 Maximum of 12 months
Dhanlaxmi Bank 9.65% (fixed) 1% of the loan amount + taxes On a case-by-case basis Up to 1 year
Shriram Finance Starts from 11.5% Starting from 0.1% Rs. 10,000 to Rs. 20 lakhs 12 months to 36 months
Muthoot Finance Starts from 12% Maximum of 1% Rs. 1500 onwards Maximum of 3 years
Manappuram Finance Starts from 12% Rs. 10 (to be paid at the time of settling the loan) Starts from Rs. 1000 to a maximum of Rs. 1.5 crores Up to 1 year

 

Wrapping Up

Gold bank loans are an excellent loan product to meet your emergency cash needs. Easy eligibility, quick disbursal, and ease of application make gold loans one of the most popular loan products in India to meet various cash needs. While applying for a gold loan, make sure to consider all the key factors – interest rates, processing fees, loan quantum, repayment tenure and ease of loan application and choose the best lender who offers you the best deal.

 

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