Gold Lending Interest Rates: Banks Offering the Lowest Interest Rates
Why Gold Loan?
In India, a gold loan is easy to obtain; anyone with unused gold in the form of jewelry can pledge their gold to receive financial assistance. A gold loan is a convenient way to get cash without having to sell your long-term investments. Many banks offer gold loans instantly once KYC and documents are verified.
Gold loan interest rates
|Bank / NBFC||Interest rates on gold loans||Processing fee|
|Bank of Maharashtra||7.00%||Rs.500 to Rs.2000 + GST.|
|National Bank of Punjab||7.00%||0.75% of loan amount|
|Bank of Punjab and Sindh||7.00% to 7.50%||Rs.500 to 10000 max|
|Union Bank||7.25% to 8.25%|
|Canara Bank||7.35%||Rs.500 to Rs.5000|
What are gold loans?
According to the HDFC Bank website, “As Gold Loans are secured loans, a bad credit history will not influence your chances of getting a loan. Neither will fluctuations in gold prices affect your loan.You can recover your gold assets in the same weight and condition once you have repaid the principal amount plus the mandatory interest.
Documents required for gold loan
According to HDFC bank, these are the required documents
- Submit one of the following:
- Passport (not expired)
- Driving license (not expired)
- Voter ID card
- Aadhaar card issued by UIDAI
- PAN card (permanent account number) (accompanied by one of the documents mentioned above) or form 60
- A passport size photo
- Documentation on allied agricultural professions (in case of reimbursement in fine for agricultural customers)
What is the bullet refund?
You must repay both the interest and the principal amount at the end of the term of the loan under a bullet repayment plan. According to the HDFC bank website, “Interest on the loan is calculated monthly but does not become payable until the end of the gold loan term. Since you repay the loan all at once, this form of gold loan repayment is called a bullet repayment plan.
What ornaments or coins can be pledged for a gold loan
According to the Kotak Mahindra Bank FAQ, “Only acceptable gold ornaments from 18 to 22 karat and only bank minted coins (24 karat) up to 50g per customer can be funded. Unfunded items/items such as hairpins, cufflinks, gold watch, gold bracelet, gold idols, gold utensils, jewelry with more than 50% off, mangalsutra thread, white gold, diamond jewelry, costume jewellery, Ginni, gold bars cannot be accepted.
Method of repayment of the gold loan
According to SBI Bank, the following methods can be used to repay a gold loan.
Gold Loan based on EMI: Repayment of Principal and Interest will begin the month following the month of disbursement.
Liquid gold loan: An overdraft account with transaction facility and monthly interest must be served.
Bullet repayment gold loan: No later than loan maturity/account closure.