Gold Loan Interest Rates 2022

Bank/NBFC	Loan Amount (in Rs.)	Interest Rate	Processing Fee
Bank of India   State Bank of India	Up to Rs. 25 lakh   20,000 to 50 Lakh	7.35% p.a. onwards 7.50% p.a. onwards	Nil for Rs. 1 lakh and maximum up to Rs. 300 Nil if applied through YONO app 0.25% of the loan amount
Canara Bank	5,000 to Rs. 20 Lakh	7.65% p.a. onwards	0.25% of the loan amount onwards
Punjab National Bank	25,000 to 10 Lakh	8.75% p.a. onwards	0.75% of loan amount
IIFL Finance	3,000 to Unlimited	9.24% p.a. onwards	Dependent on the scheme
Rupeek	No limit	9.69% p.a. onwards	Nil
HDFC Bank	25,000 to Unlimited	9.90% p.a. onwards	1.5% of the loan amount
ICICI Bank	10,000 to 1 crore	11% p.a. onwards	1% of loan amount
Muthoot Finance	1,500 to Unlimited	12% p.a. onwards	Shared at time of application
Axis Bank	25,001 to 25 Lakh	12.50% p.a. onwards	0.5% of the loan amount
Fincare Small Finance Bank	5,000 to 25 Lakh	12.99% p.a. onwards	Up to 0.5% of the loan amount

Note: The mentioned details are subject to change at the sole discretion of the lender. GST and service tax may be levied on the mentioned charges.

To apply for gold loan, applicants are required to get their self-owned gold, gold ornaments or coins appraised by a bank nominated appraiser. They also must be above 18 years of age with a steady source of income and maximum up to 65 years.

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 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. To further simplify the point let us take the example of Indian Overseas Bank.

Indian Overseas Bank, as of March 2021, charges the following interest rate on the loan amount.

Loan Amount Bracket	Interest Rate
Up to Rs. 3 Lakh	7.05% p.a.
Between Rs. 3 Lakh & up to Rs. 5 Lakh	7.70% p.a.
Over Rs. 5 lakh	8.15% p.a.

Purity & Weight – The quantity and quality of the gold articles affect the maximum gold loan amount that will be given to you. The quality and quantity of the gold articles are checked by a bank nominated appraiser. Note: many banks do not accept gold ornaments that are below 18 k.

Note In the case of jewellery, gold loan is provided against the value of gold in jewellery only. Thus, the bank will not consider the value of precious stones embedded in the gold jewellery in its appraisal.

Income – Most banks do not ask for income proof from their applicants. However, banks prefer extending a loan to those customers that have a stable source of income.

Lending Rate of Banks – MCLR (Marginal Cost of Fund Based Lending Rate) or RRLLR (Repo Rate Linked Lending Rate) affects the interest rate offered to applicants. Banks that issue gold loan against RRLLR transmit RBI Repo Rate cuts much faster to applicants.

You can apply for gold loan through Paisabazaar. Follow the steps given below:

1. Click here to visit our gold loan application page
2. Enter the required details and proceed ahead
3. Choose the bank or institution from whom you want to apply for the gold loan from
4. Follow the on-screen instructions to complete the process

Once you have submitted the form a representative from the bank or NBFC will call you and share further instructions. The representative might visit you to appraise the gold articles or you might be required to visit the bank. The lender will evaluate your gold items and grant the loan accordingly.

If you are applying for gold loan for the first time, then you should be aware of the following things:

Maximum Loan Amount – Banks extend a percentage of the value of gold as loan amount. Currently, you can get up to 90% of the value of gold in the gold jewellery as loan amount. However, the bank has the final say on how much loan amount it extends to its applicants. So if the bank appraises your gold articles at Rs. 10,000, then you can get up to Rs. 9,000 as loan amount.

Safety of Your Gold Item – The banks take over the responsibility of safeguarding your gold articles once you submit it with them. Some lenders even insure your gold articles. If you want, you may enquire about the safety measures taken by the bank to safeguard your gold articles.

Loan Payments Default – The bank reserves the right to auction off your gold articles in the event you fail to pay off the loan amount. Hence, you must pay off the amount in a timely manner.

Note We suggest you compare the interest rate and other fees and charges of various banks before applying for a gold loan. If you believe you will be able to pay off the loan amount before the end of tenure then apply for a loan that does not charge a foreclosure fee.

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.

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.