Gold Loan In India
Gold Loan Interest Rates Feb 2020
| Gold Loan Rate | 10.50% |
| Processing Fee | Upto 2% of loan amount |
| Loan Tenure | 1 day to 36 months |
| Gold Loan per gram | ₹ 2,365 to ₹ 2,890 depending upon the purity of the gold |
| Repayment Options | EMI, Bullet Repayment Scheme and Overdraft |
- Check best Offers starting @ 10.50%
- Avail loan with no income proofs and no CIBIL score
- Get best gold loan rate schemes from HDFC, Axis Bank, Manappuram and Yes Bank
- Apply online gold loan and get disbursal within a few hours
Please Re-confirm Your Number
Re-confirm the Type of Gold
Do you have any jewelry?
Gold Loan Interest Rates Comparison
| Bank | Gold Loan Interest Rates | Processing Fee | Max Tenure |
|---|---|---|---|
| SBI Gold Loan | 10.55% | 0.50% of the loan amount subject to a minimum of Rs. 500 | 36 months |
| Muthoot Gold Loan | 12.00% | 0.25% to 1% of loan amount. | 36 months |
| Manappuram Gold Loan | 12.00% | Rs. 10 (to be paid at time of settlement) | 12 months |
| HDFC Bank | 10.50% | Nil* to 1.50% | 24 months |
| IIFL | 12.00% | Nil | 11 months |
| Yes Bank | 11.25% | 0.75%, Minimum Rs. 500 | 36 months |
| ICICI Bank | 10.00% | 1% of the loan amount | 12 months |
| Federal Bank | 11.75% | Nil | 12 months |
| Canara Bank | 12.00% | 1% of the loan amount, min Rs. 1,000 and max Rs. 5,000 per loan | 12 months |
| Andhra Bank | 10.70% | Nil processing fees | 12 months |
| Axis Bank | 10.49% | 0.25% - 1% of loan amount | 24 months |
| IndusInd Bank | 11.15% | Upto 1% of loan amount subject to a minimum of Rs. 750. | 12 months |
| PNB | 10.05% | upfront fees of 0.70% of loan amount + taxes | 12 months |
Best Banks to Apply Online Gold Loan
Based on a comparison of gold loan rates of all banks, SBI, HDFC Bank, Yes Bank, Andhra Bank, IndusInd Bank give the lowest gold loan interest rates in the range of 10.50% to 11.5%. Similarly, based on a comparison of processing fees, HDFC Bank, IIFL, Federal Bank are the best banks to take loan against gold as they charge the lowest processing fees of Nil Charges.
Best Gold Loan
Gold Loan Interest Rate Calculator
Interest rates are charged on the borrowed loan amount for the loan tenure. Lowest interest rate on gold loan is 10.50%. Interest rate to get loan against gold depends on multiple factors -
Loan amount – This is the amount borrowed by the borrower from a bank. Generally, interest rate are high for smaller loan amount and vice-versa.
Loan to Value Ratios - Banks charge higher interest on gold loan with high LTV ratio. Hence, higher the loan to value of jewellery, higher the interest rate and vice versa.
Relationship with the Bank - Banks offer lower rate of interest on jewel loan for their existing account holders with a quick turnaround.
Loan Against Gold Schemes
Gold Loan Schemes can be categorized based on the purpose of lending. Banks usually offer lower rate of interest for agricultural gold loans which are offered to farmers and people engaged in agriculture for meeting their farming expenses.
- Agricultural Gold Loans: These are loans extended to farmers and agriculturists
against gold ornaments to provide them finance for crop production expenses and investment
purpose in agriculture or allied agricultural activities. Key Features of such loans are:
- Evidence of farming activity in form of proof land records is required
- Written undertaking by the borrower on the purpose for which he intends to use the loan is required. Banks may also monitor the end use of such loans
- Loans extended for agriculture are categorized under priority sector lending and are eligible for interest subvention scheme from government, which reduces the interest cost to the borrower
- These loans are allowed generally for a maximum period of 3 years
- Some banks also offer the option of overdraft facility on such loans
- Interest Rate on agricultural gold loans ranges from 8.00 to 10.00 %
- Non Agricultural Gold Loans: Loans extended to all other categories of borrowers excluding farmers and agriculturists are known as non agricultural gold loans. These loans are available to all individuals including salaried, self employed professionals, businessmen, women, females, housewives, students, retired officials who own gold and want to pledge the same to get loan. The features on non agricultural gold loans have been explained under the loan schemes by repayment options.
- Bullet Repayment: This is one of the most popular repayment option offered by banks
and NBFCs, where the entire principal amount is repaid at the end of the tenure. This
repayment option is more prevalent for shorter tenure jewel loans of less than 6 months, as
this allows the borrower to utilize all borrowed funds for the required purpose and hence,
save them from the burden of repaying principal every year. Key Features of such schemes
are:
- Loan amount is repaid at the end of the tenure
- Interest is calculated on a monthly basis, with an option to pay interest only EMIs every month, where you pay monthly interest in the form of EMIs
- Some banks allow a lower LTV of 65% on such schemes compared to maximum LTV of 75% on other loan schemes.
- EMI Scheme: Though not very popular earlier, this scheme is increasingly being
offered to jewel loan borrowers. Borrowers are required to pay monthly instalments or
monthly EMIs to banks. This scheme is especially popular for longer tenure gold loan schemes
with greater loan amounts. Key Features of such schemes are:
- Lowest EMI for a Rs 1 Lakh loan is ₹ 2,560 at the lowest gold loan interest rate of 10.50% and maximum tenure of 4 years.
- Attractive LTVs of upto 75%
- Banks call for 6 months PDCs for EMIs. Some banks exempt the borrowers from PDC requirement for larger ticket size loans
- Overdraft Scheme: This schemes is especially designed for businessmen and self
employed who have fluctuating requirement for funds. The overdraft scheme allows the
borrowers to withdraw any fund requirements or deposit any surplus in an overdraft
requirements within a pre approved credit limit. Interest is charged only on the utilized
portion at any given point of time. Key Feature of such schemes are:
- Has an overdraft facility that allows deposit and withdrawal of funds during loan tenure
- Interest expenses are minimized as it allows the borrower to deposit funds in the account when he has surplus funds
- Available on all ticket sizes, though will be more suitable for relatively larger ticket size loans
- Also comes with an option to renew the limit at the end of the tenure by paying processing fees
Comparison of Gold Loan Rates in India
- Gold Loan Processing fees – Most banks charges minimum processing fees of Rs. 1,000 to upto 2%. Some banks may also offer lower processing fees. To get lowest fee, gold loan interest rate comparison, offers and cashback applying online through MyLoanCare.
- Gold Loan Prepayment and foreclosure – Nobody wants to keep paying interest on a loan when you have surplus money available to repay it. When you want to repay your loan partially before time, it is called part prepayment. In case you decide to pay the entire loan amount before time, it is called foreclosure. Banks typically levy prepayment or foreclosure charges in such situations and these can range from nil to even upto 1%. So, check carefully if the low interest rate gold loan you are getting comes with high prepayment or foreclosure charges. Some loans also come with a lock-in-period and cannot be repaid before time.
Checklist for Gold Loan
- Identity proof
- Residence address and ownership proof
- Photo identity proof
- Passport size photograph
Documents Required
| Identity Proof | PAN Card/ Aadhaar Card/ Voter’s ID Card/ Passport Copy |
| Address Proof | Rent agreement/ Passport/ Driving License/ Utility Bills/ Aadhaar Card/ Voter’s ID Card |
Frequently Asked Questions
Following are the banks with lowest interest rate on gold loan:
| Banks | Rate of Interest |
|---|---|
| SBI | 10.55% |
| HDFC Bank | 10.50% |
| Yes Bank | 11.25% |
| ICICI Bank | 10.00% |
| Axis Bank | 10.49% |
The documents required for availing gold loan are:-
- Two passport size photograph
- Identity proof (PAN card/ passport/ Aadhaar card/ voter id card)
- Address proof (Electricity bill/ telephone bill/ bank statement)
For an Indian, jewelry is extremely precious and close to heart. Yet, in times of need, you might need to mortgage them to meet your urgent expenses. At such times, you need to ensure that you get the maximum gold loan per gram. It is advisable to choose the mortgaged jewelry with the help of following guidelines:
- Specially minted gold coins of banks of up to 50 grams or 22 carat gold ornaments will offer you the best rates.
- If you offer hallmarked jewelry, you will be charged a lower processing fees and hence, your cost of loan will be lower.
- Lower purity gold ornaments of 18 and 20 carat will get your lesser amount of gold loan.
- Ornaments with a lot of other stones including diamond, pearls, ruby etc might not fetch you a good loan amount as banks deduct the weight of these stones to calculate the net weight of gold and hence, the loan amount you will be eligible for can reduce depending on the net weight.
- Avoid pledging your mangal sutras, as many banks as a policy do not accept mangal sutras as a valid mortgage, with the exception of few banks who accept mangalsutras without black beads as a valid security.
- Try to use larger pieces of jewelry in place of smaller items of gold.
The loan you avail by giving your jewelry as collateral is called Jewel loan. Lenders accept Gold jewelry or ornaments, which are of 18 carats and above. Anything below 18 carats is not accepted as security for availing loans against gold ornaments.
Why do I need Gold Loan?These loans are usually taken for short term requirements. Generally, these are used for children education, marriage and other financial emergencies in the family. Usually rate of interest on jewel loan is relatively low as it a secured loan for banks and NBFCs.
What are the benefits of Gold Loan?Gold Loan has the following benefits:
- Allows you to utilize your jewel holdings in times of urgent expense requirements and emergencies
- Low interest cost compared to personal loans
- Easy loans with no income proofs and no CIBIL checks required.
- Also allows first time borrowers and borrowers with bad credit to get loans.
- Helps improve CIBIL score, as timely repayment is recorded in your CIBIL reports
- Instant loans with turnaround time of few hours to 1-2 days
- Loan amounts of up to Rs 50 lakh also available
- No end use restrictions. The loan can be taken for any personal or business expenses
- No proof in the form of invoice or purchase bill of the jewelry required
We do not see any significant disadvantages of taking a gold loan except that you need to
part away with your gold holdings and take them to the nearest branch of the lender for
valuation and depositing it with the bank. RBI has specified strict guidelines for ensuring
complete safety of your ornaments when they are pledged with a bank or a NBFC.
In addition to this, for salaried employees working with reputed companies taking a gold
loan might be easier and come at a low rate of interest compared to personal loan.
To avail the gold loan, credit score is not mandatory. So, whether you have a credit history or not, is not considered during the loan application process.
Is taking gold loan safe?All the top banks and NBFCs provide the gold loan. The gold you submit as collateral is kept safe under high security as per the guidelines of RBI. After you have repaid the loan along with interest, your gold is returned to you in the same form. Thus, availing the gold loan is safe.
Which is better: Gold Loan Vs Personal Loan?A gold loan is a secured loan, while a personal loan is an unsecured loan. The average rate of interest that you can get in the gold loan is much lower than what you will get in personal loan. However, the maximum tenure of the loan is upto 3 years for the gold loan while it is 5 years for the personal loan. So, in case you have gold, and you think you can repay the loan within 3 years, gold loan is a better option in this scenario.
How can I apply for Gold Loan?You can apply in several ways.
- You can directly visit the bank branch and meet the sales person, contact a loan agent or apply online at any bank or NBFC’s website.
- The facility of tracking your loan is available with the bank.
- You can also compare gold loan interest of all banks online at MyLoanCare and apply for loan against jewelry through our website. We will assign a customer representative officer to you who will assist you in the loan process. You will get a call from our customer representative officer within a few minutes of filling the application form on our site, who will assist you with rest of the gold loan process. Before applying for a gold loan, calculate your eligibility with online calculator.
You can apply for a loan against gold online through any of the marketplaces. You query will be referred to the best banks for gold loans after which:
- You will be contacted by bank representatives who will explain the process, documents required and also schedule a convenient appointment for you to visit their nearest branch.
- Once your appointment is scheduled, you need to visit the branch with your jewelry. Your jewelry will be tested and valued by appointed valuers at the bank. If the jewelry passes the test and is in line with the specifications mentioned by you will applying, you will get the loan required. If the jewelry is found to be of lower purity or lower weight, you may be offered a lower loan amount.
- Also, remember that even if one piece of jewelry is fake, the bank may refuse to offer any loan to you.
- Once the jewelry is valued and loan amount is agreed and sanctioned, the bank will seal your jewelry in a packet in your presence and under CCTV recording. These packets are multi-layered to ensure complete safety of your ornaments.
- The jewels are than kept in bank safes in strong rooms maintained by the banks.
- The bank will simultaneously issue you a disbursement letter with loan amount and other details which have to be signed by you and the bank's representative.
The popular perception is that gold prices will never fall significantly in India. However, there have been situations, when gold prices in India have fallen rapidly. RBI allows a maximum LTV of 75% of the gold pledged. It also requires the lenders to maintain this LTV on an ongoing basis. Banks safeguard this LTV by extending EMI loans and also bullet loans where regular interest is paid every month. However, in case of sharp decline in gold prices, banks may do the following:
- The financial institution might ask for more collateral or gold to maintain the LTV
- The financial institution might request the borrower to partly pay a nominal amount which goes towards the principal
- In rare cases, if the borrower fails to make this payment, the gold can be auctioned after giving due notice period and multiple reminders to the borrower.
If any individual fails to pay his EMI, interest or principal repayment on time, he is sent a follow-up reminder by the bank. Banks also levy a late payment fees as penalty on the borrower. In case of genuine borrowers, the banks may also offer an option to extend the tenure of the loan or renew the loan facility. If the borrower fails to repay the loan in 3 to 6 months, he will be treated as a default customer and the bank will send him a legal notice asking him to pay his dues, failing which the bank has the right to confiscate the jewelry kept with them and auction it, if required.
What is the minimum and maximum tenure of jewelry Loan?Jewel loans generally taken for shorter time period of less than 1 year.The tenure can range from 6 months to 36 months.
Do I need to open bank account to service my jewelry Loan?Yes, you need to have at least one functional bank account in your name. It is even better if you have an account with the same bank from which you would like to get a loan.
Can I apply for Gold Loan jointly with my spouse?Yes, you can apply for jewelry loan jointly with a co-applicant (either be your spouse or your parents).
Does it affect my co-applicant if I default on Gold Loan?Yes, if you fail to pay the loan on time then it will also affect your co-applicant as default in loan will affect his/her s CIBIL rating as well.
Will banks charge extra fee if I fail to repay Loan on time?Yes, banks charge penal fee for late payment. The percent of penal charge can be over and above the existing rate of interest or above the overdue amount. Most banks charge penal fee up to 2% p.a. over and above applicable rate of interest. Some banks also charge up to 24% p.a. as penal interest over and above applicable rate of interest. So be careful while selecting particular scheme and do check the penal fee and other charges
How much time will it take for me to get money?Generally banks and NBFC's offer quick disbursement of jewel loan within an hour of walk-in at specialized loan branches. MyLoanCare can help you connect with your nearest bank branch. Play safe with your valuables and visit the branch only after your appointment is confirmed by us.
Who can access the customer online portal?All existing customers get access to customer netbanking portal by login their user id and password.
Nowadays, almost all banks offer attractive schemes on Gold Loan at competitive rates with many customer friendly features. You can do rates comparison, check your eligibility, calculate EMI, apply online and get the best Gold Loan rates. MyLoanCare helps you throughout the loan process from the day you apply to the time you get disbursement. You can register with us, track your loan status on a regular basis and get an option to earn attractive cashbacks and refer and earn benefits.
