Gold Loan can be availed by pledge of gold ornaments including gold coins sold by banks with minimum paperwork and low interest rate. Gold loan can be availed for meeting expenses of sudden medical exigency, margin money for Home Loan and/or Education Loan, travel plans including consumption purpose.
Gold loan interest rates vary with bankbanksthatpurposes; however, one should be aware of other charges which will be applicable when availing gold loan. The charges include processing fees, foreclosure charges, valuation charges, documentation charges, Overdue Handling Charges (delinquent accounts) are some o them.
Latest gold loan interest rates
Bank / NBFC | Gold Loan Interest Rate | Processing Fee |
Kotak Mahindra Bank | 8.00% to 24.00% | Upto 2% + GST |
HDFC Bank | 8.50% to 17.30% | 1% of disbursal amount |
Central Bank of India | 8.45% to 8.55% | 0.50% of loan amount |
Uco Bank | 8.50% | Rs.250 to 5000 max |
Indian Bank | 8.65% to 9.00% | |
Union Bank | 8.65% to 9.90% | |
SBI | 8.70% | 0.50% + GST |
Bandhan Bank | 8.75% to 19.25% | 1% + GST |
Punjab & Sind Bank | 8.85% | Rs.500 to 10000 max |
Federal Bank | 8.99% | |
South Indian Bank | 9.01% to 22% | |
Bank of Baroda | 9.15% | Applicable charges + GST |
Punjab National Bank | 9.25% | 0.75% of loan amount |
Bank of Maharashtra | 9.30% | Rs.500 to Rs.2000 + GST. |
City Union Bank | 9.50% | Nil |
Canara Bank | 9.60% | Rs.500 to Rs.5000 |
Indusind Bank | 9.60% to 16.00% | 1% of loan amount |
J & K Bank | 10.00% | Rs 500 + GST |
ICICI Bank | 10% to 17.95% | 1% of loan amount |
Karur Vysya Bank | 10.25% | 0.50% (inclusive of Appraisal charges) |
Karnataka Bank | 11.23% | |
Axis Bank | 17.00% | 0.5% + GST |
Muthoot Finance | 22% p.a. with 2% rebate if 100% interest is paid monthly | |
AU Small Finance Bank | Upto 24.00% | 1% + GST |
Source: Compiled by ETIG; interest rates as February 29, 2024.
What happens if a Gold Loan is not paid?
According to the HDFC Bank website, “In the situation of a Gold Loan non-repayment , the bank begins with sending reminders via email and texts to intimate the borrower regarding EMI payment. After a stipulated period certain penal charges or interest rates are levied on the Gold Loan amount. Eventually, if the Gold Loan amount is not paid after repetitive follow-ups over the due course stipulated by the bank, the bank will proceed to sell or auction the gold ornaments and repay the loan amount.
Banks offer different repayment options to gold loan customers.
Repayment Mode
Gold Loan (EMI based): Repayment of Principal and Interest will commence from month following the month of disbursement.
- 3 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
- 6 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
- · 12 Months Bullet Repayment Gold Loan: Interest and Principal on or before end of term.
Repayment Period
Maximum :
- Gold Loan (EMI based) : 36 months
- 3 Months Bullet Repayment Gold Loan: 3 months
- 6 Months Bullet Repayment Gold Loan : 6 months ,
- 12 Months Bullet Repayment Gold Loan: 12 months