Gold loan is offered to meet urgent cash requirements by submitting gold, gold ornaments/jewellery/coins as collateral or security with the bank or lender. The bank charges interest on the borrowed amount and once the loan is repaid in full, the gold items kept as collateral are returned back safely. Lenders usually offer gold loans at interest rates starting from 8.80% p.a. onwards.
Gold Loan Interest Rates
| Lenders | Interest Rate |
| Bank of India | 9.05% p.a. onwards |
| Canara Bank | 9.00% p.a. |
| Punjab National Bank | 9.25% p.a. onwards |
| IIFL Finance | 11.88%-27% p.a. |
| Rupeek | 0.74% per month (8.88% p.a.) onwards |
| ICICI Bank | 9.25% p.a. |
| Axis Bank | 17%-19% p.a. |
| Indiagold | 0.80% per month onwards |
| State Bank of India | 9.05%-10.20% p.a. |
| Indian Bank | 8.80%-10.65% p.a. |
| Muthoot Finance Limited | 10.90% onwards |
| Manappuram Finance Limited | 9.90% onwards |
| South Indian Bank | 14.80%-15.05% |
Rates as of 7th November 2024
Documents Required
Banks generally ask for the following documents. If there is any other requirement, the bank will share the same at the time of application.
- Duly filled Application Form with 2 passport-sized photographs
- KYC Documents of applicant: Passport, Voter’s ID card, Aadhar card, Driving License, PAN card, Utility Bills (Water & Electricity)
- Last 12 months’ bank statement
- Any other document required by the lender
Factors that Affect Gold Loan Interest Rate
Factors that affect the interest rate on gold loan are:
Loan Amount – The interest rate that the bank charges you is directly related to the loan amount. Hence, if you require a large loan amount, be ready to pay higher interest on it.
Gold Loan Repayment Methods
The various methods through which you may pay off your gold loan amount are:
Bullet Repayment | EMI | Partial Payment | Pay Interest as EMI & Principal Later
Bullet Repayment – Under this method you must repay the entire amount, principal and interest, as a lump sum at the end of tenure.
Pay Interest as EMI & Principal Later – Here, You have the option to repay the interest amount per month as EMI. However, the borrowed amount must be paid in full at the end of tenure.
Regular EMI – The due amount, interest and principal, will be divided equally and made payable every month for the full duration of the loan.
Partial Payments – Under this method, you may pay the due amount as and when you see fit. The full amount must be paid off before the due date.
Gold Loan Interest Rates – FAQs
Q. Can anyone avail the gold loan?
Ans. Gold loan can be availed by anyone who is over 18 years of age and should own gold ornaments or items. Applicants must meet the bank’s other internal eligibility criteria as well.
Q. How long does it take to process Gold Loan application?
Ans. Gold loan is usually disbursed on the same day. However, the bank may take some time to appraise your gold articles, this may cause some delay. Once your gold articles have been appraised and verified, you can expect quick disbursal.
Q. How can I repay the gold loan amount?
Ans. You can repay the loan amount via cash, cheque, Demand Draft (DD) or through fund transfer. You may also use the bank’s mobile app to pay off the amount.
Q. Is it possible to repay my gold loan amount partially?
Ans. Yes, some gold loan schemes allow you to make a partial payment. However, your gold ornaments will be released only when the entire outstanding amount has been repaid.
Q. Can I prepay or foreclose my gold loan?
Ans. Yes, you may foreclosure the loan account. However, you might be charged foreclosure charges.
Q. How much loan amount can I expect for my gold articles?
Ans. The loan amount is dependent on various factors which include gold rate, quantity & purity of gold in the ornaments and relationship with the bank.