Gold loans starting at 7%: Find out what banks and NBFCs are currently offering

Lenders usually offer a loan amount not more than 75% of the pledged gold’s market value.

Gold loans are one of the most popular borrowing tools in our country, both for the fulfilment of our critical financial goals and also to bail us out during emergencies. High accessibility of loan collateral, lower interest rates than other unsecured financing facilities like personal loans in many cases, the possibility of quick and hassle-free loan disbursal and lower reliance on the borrower’s credit score are some of the reasons behind the popularity of these loan products.

Most banks and non-banking finance companies (NBFCs) offer gold loans in multiple tenure options; as such it’s important for you to compare your options to find the lender with the best repayment terms.

That being said, before applying for a gold loan, ensure the value of the pledged gold is enough to meet your financing requirements. Lenders usually offer a loan amount not more than 75% of the pledged gold’s market value. Meaning, if your collateralized gold is valued at Rs 1 lakh, your gold loan amount is unlikely to be more than Rs 75,000, according to BankBazaar.

Also, keep in mind other charges like processing fee and foreclosure charges (if applicable) before finalizing your decision. Lastly, ensure you have a thorough repayment plan to avoid any penalties and a potential loss of a precious asset. All your debt obligations combined shouldn’t ideally exceed 40% of your net household monthly income to ensure timely repayments and minimize financial stress.

To help you make an informed decision, here’s a list of the gold loan interest rates currently being offered by some of the leading banks and NBFCs in our country. We have also provided the indicative EMIs for Rs 1 lakh gold loans taken for 2-year tenure by each of the lenders mentioned in the table below.

Do note, we have only considered the lowest advertised gold loan interest rates for each of the lenders, have not considered processing fee or any other charges for EMI calculation, and the rates applicable to you could be higher depending on your loan amount, LTV ratio, loan tenure or any other terms and conditions of your chosen lender.

Interest Rates and Indicative EMIs for Rs 1 lakh Gold Loans With 2-year Tenures

Disclaimer: Interest rates on gold loans for all listed (BSE) public and private banks and selected NBFCs have been considered for data compilation. Banks for which data is not available on their website are not considered. Data collected from the respective websites on June 1, 2021. Lenders have been listed in ascending order on the basis of interest rate i.e. bank/NBFC offering lowest interest rate on gold loan (for various loan amounts) is placed at top and highest at the bottom. The lowest advertised rate offered by the lenders have been considered in the table. Indicative EMIs have been calculated on the basis of interest rate mentioned in the table for Rs 1 lakh gold loan with a tenure of 2 years (processing fee and other charges are assumed to be zero for EMI calculation). *IRR for Qtr January to March 21.

Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.