Gold loans are loans where you give your gold items like jewellery as security to the bank or NBFC. It's easy to get these loans with just a few documents. Besides banks like SBI, ICICI Bank, HDFC Bank, some other companies like Muthoot Finance and Manappuram Finance also give gold loans.
The amount you can borrow against your gold items depends on factors like the purity of the gold, the Loan-to-Value (LTV) Ratio, and the policies of the lender. Each lender may have its own minimum and maximum limits. For instance, ICICI Bank offers gold loans ranging from Rs 10,000 to Rs 1 crore. SBI provides gold loans between Rs 20,000 and Rs 20 lakh. On the other hand, Muthoot Finance starts gold loans from a minimum of Rs 1,500 without any maximum limit.
List of Top 10 Banks / NBFCs offering Gold Loan in India
1. SBI Gold Loan
With State Bank of India (SBI), you can avail a gold loan of up to Rs. 50 lakh, which is known for its low-interest rates in India.
Key Features:
- Age: Applicants must be 18 years and above
- Interest Rate: Starts from 7.50% per annum onwards
- Loan Amount: Ranges from Rs. 20,000 to Rs. 50 lakh
- Tenure: Flexible repayment period of up to 36 months
- Gold Items Accepted: Gold ornaments verified for quality and quantity
- Processing Charges: Nil if applied through YONO, otherwise 0.25% + GST with a minimum of Rs. 250 + GST
2. HDFC Bank Gold Loan
With HDFC Bank, you can borrow up to 80% of the market value of your gold as a loan.
Key Features:
- Processing Fee: 1.5% + GST
- Interest Rate: Starts from 9.90% onwards
- Loan Tenure: Flexible repayment period ranging from 3 months to 24 months
- Loan Amount: Loans start at Rs. 25,000 (Minimum loan amount of Rs. 10,000 available in rural markets)
- Gold Loan Schemes: Various options including Term Loan, Overdraft (OD), and Bullet repayment
- Custody: Your gold is stored under a unique triple-layered security system
3. Axis Bank Gold Loan
Axis Bank offers gold loans ranging from a minimum of Rs. 25,001 to a maximum of Rs. 25 lakh.
Key Features:
- Age: Eligible for individuals aged 18 to 75 years
- Interest Rate: Starts from 12.50% per annum onwards
- Loan Amount: Available from Rs. 25,000 to Rs. 25 lakh
- Tenure: Flexible repayment period ranging from 3 months to 3 years
- Gold Items Accepted: Jewellery and gold coins purchased from banks
- Processing Charges: 1% of the loan amount
4. Manappuram Finance Gold Loan
Manappuram Finance provides gold loans of up to Rs. 1.5 crore.
Key Features:
- Interest Rate: Up to 29% per annum
- Loan Amount: Ranges from Rs. 1,000 to Rs. 1.5 crore
- Tenure: Minimum repayment period of 3 months
- Schemes: Offers 'High Loan to Value' and 'Low Interest Rate' schemes.
- Processing Fee: Rs. 10* at the time of loan settlement. Additional Processing Fee on Repledge: 0.07%* of New Pledge Value
5. Canara Bank Gold Loan
Canara Bank's gold loan, known as Swarna Loan, offers two additional variants: Swarna Overdraft and Swarna Express.
Key Features:
- Processing Charges: 0.25% of the loan amount
- Interest Rate: Starts from 7.65% per annum onwards
- Loan Amount: Available from Rs. 5,000 to Rs. 20 lakh
- Tenure: Flexible repayment period ranging from 6 months to 2 years
- Gold Items Accepted: Jewellery and gold coins purchased from banks
6. ICICI Bank Gold Loan
ICICI Bank offers loans of up to Rs. 1 crore against your gold jewellery.
Key Features:
- Interest Rate: Starts from 11% per annum onwards
- Loan Amount: Ranges from Rs. 10,000 to Rs. 1 crore
- Tenure: Flexible repayment period ranging from 3 months to 12 months
- Disbursal Time: Get your loan disbursed within 60 minutes
- Processing Fee: 1% of the loan amount
- Documentation Charges: Rs. 199
7. Federal Bank Gold Loan
Federal Bank offers gold loans of up to Rs. 1.5 crore.
Key Features:
- Interest Rate: Starts from 8.50% per annum onwards
- Loan Amount: Ranges from Rs. 1,000 to Rs. 1.5 crore
- Tenure: Minimum repayment period of 6 months
- Repayment Options: Choose between lump sum payment or EMIs
- Rate per Gram: Maximum amount per gram is up to 85% of the gold price
- Gold Items Accepted: Gold ornaments verified for quality and quantity, with security pledged against 22 karat gold ornaments
8. Bank of Baroda Gold Loan
Bank of Baroda provides gold loans of up to Rs. 25 lakh at a highly competitive interest rate.
Key Features:
- Age: Eligible for individuals aged 18 to 70 years
- Interest Rate: Starts from 8.75% per annum onwards
- Loan Amount: Maximum of Rs. 25 lakh
- Tenure: Up to 12 months
- Gold Items Accepted: Ornaments, jewellery, and specially minted gold coins sold by banks (Minimum 18 karat gold)
- Processing Charges: Ranges from 0% to 0.5% of the sanctioned limit, with a maximum of Rs. 3,500
9. Muthoot Finance Gold Loan
Muthoot Finance Ltd. provides gold loans at a competitive interest rate starting at 12% per annum.
Key Features:
- Lowest EMI per Lakh: Rs. 3,321
- Interest Rate: Starting from 12% per annum
- Loan Amount: Minimum of Rs. 1,500; Maximum amount has no limit
- Loan Tenure: Flexible repayment period ranging from 7 days to 36 months
- Collateral / Security: Accepts any gold item with a purity of 18K to 22K, weighing up to 50 grams
- Processing Fee: Ranges from 0.25% to 1% of the loan amount
10. IIFL Finance Gold Loan
With IIFL, you can secure a loan against your gold in as little as 5 minutes. Simply visit any IIFL Gold Loan branch with your gold items, along with your ID proof and address proof, and receive instant approval.
Key Features:
- Interest Rate: Starts from 9.24% per annum
- Loan Amount: Available from Rs. 3,000 onwards
- Tenure: Flexible repayment period ranging from 3 months to 11 months
- Loan Disbursal Time: Get your loan amount disbursed within 30 minutes
- Schemes: Customized schemes tailored to meet your specific requirements
Frequently Asked Questions (FAQs)
Can I get back part of my gold jewellery by making a partial loan payment?
This policy differs among banks. For instance, IIFL permits borrowers to release a part of their pledged gold by making a partial payment, whereas banks like ICICI may not offer this option. It's advisable to inquire about this facility with the bank or NBFC when applying for a gold loan.
How much loan can I avail against my gold?
The loan amount depends on the rate of gold per gram on the given date and the purity and net weight of gold in your gold ornaments.
How will interest be calculated if I make a part payment?
If you make a partial payment on your loan amount, future interest will be charged only on the remaining balance amount after the part-payment.
What happens if I am unable to make a loan payment?
If you're unable to make a payment or miss making a payment on time, you'll be charged penal interest at a rate determined by the bank or NBFC, in addition to the regular interest rate.
What is the Prepayment option?
In a gold loan, similar to any other loan, the borrower is required to repay the principal amount along with the interest either at the end of the loan term or through Equated Monthly Installments (EMIs). However, borrowers have the option to pre-pay the total amount, including the principal and accrued interest, before the end of the loan term or during the term. Some banks or NBFCs may not impose any penalty for prepayment, while others may do so.
What happens if one is not able to repay their loan amount?
Banks or NBFCs will remind customers regularly to make payments after the loan term ends. If the payment isn't made, they'll send a final notice about auctioning the gold. If the loan isn't repaid, the deposited gold may be sold in an auction.