To tide over a financial emergency or take care of an urgent cash requirement, an individual has various options. These options include taking a personal loan, gold loans, or redeeming the investments, etc. In this post, let’s take a look at the lowest interest rates on gold loan 2021.
Table of Contents
What is Gold Loan?
A gold loan is also called a loan against gold. It is a secured loan that a borrower takes from a lender by pledging gold articles such as gold jewelry, ornaments, etc. as collateral. The loan amount sanctioned is a certain percentage of the gold’s value based on the current market value and quality of gold.
The great thing about gold loans is that you don’t need good credit scores or any proof of income to get it. Moreover, the time taken to disburse a loan against gold is very short.
Features and Benefits of Gold Loans
Following are some salient features and benefits of a gold loans.
1. The gold loans are fast and easy. The time taken to disburse a loan against gold is very short. Lenders generally disburse this loan within an hour.
2. Unlike other loans, you do not need to have a good credit score for availing this type of loan.
3. Gold loans are secured. Therefore, the bank interest rates on gold loan are less as compared to a personal loan, which is an unsecured loan.
4. The processing fees on gold loans are very low and in some cases, it is zero.
5. Most lenders don’t levy charges for the early closure of this loan.
6. Banks and NBFCs generally do not ask for income proof for this loan, which is secured against gold.
7. You have to pledge gold articles such as gold jewelry, ornaments, bars, coins, etc. as collateral to avail of this loan.
Lowest Interest Rates on Gold Loan
There are many banks and non-banking finance companies (NBFCs) offering gold loans in India. If you are planning to take a gold loan and want to know which bank has lowest interest rate for gold loan. What is interest rate on gold loan? How much interest on gold loan?
If your answer is yes to these questions then here is a list of 8 banks which are currently offering the lowest interest rates on gold loan in the country.
Gold Loan Interest Rates 2021
| Bank/NBFC | Interest Rates | Loan Amount | Maximum Tenure | Processing Fee |
| Punjab & Sind Bank | 7.00% p.a. onwards | Rs.10,000 to Rs.20 lakh | 12 Months | Upto Rs.2 lakh: Rs.500, Above Rs.2 lakh: 0.50% of loan amount (Max.Rs.10000). |
| Indian Overseas Bank | 7.05% p.a. onwards | Upto Rs.25 lakh | 36 Months | |
| Union Bank of India | 7.20% p.a. onwards | Upto Rs.25 Lakh | 36 Months | |
| Bank of India | 7.35% p. a. onwards | Up to Rs.25 lakh | Upto Rs.1 lakh: Nil, Over Rs.1 lakh: Rs.125 to Rs.300. | |
| Bank of Maharashtra | 7.35% p.a. | Upto Rs.20 lakh | 24 Months | Nil upto 31.03.2021 |
| State Bank of India | 7.50% p.a. | Rs.20,000 to Rs.50 lakh | 36 Months | 0.25% of the loan amount, Minimum Rs. 250 |
| Canara Bank | 7.65% p.a. | Rs.5,000 to Rs.20 lakh | 24 Months | 0.50% of the Loan amount, Minimum Rs.500 and Maximum Rs. 5,000 |
| City Union Bank | 8.00% p.a. onwards | Upto Rs.20 Lakh | 12 Months | Nil to maximum Rs.750. |
The above data of interest rates on gold loan 2021 are collected from the respective bank’s website on March 28, 2021. Banks are listed in ascending order based on the lowest interest rates. The gold loan interest rates mentioned above are subject to change at the discretion of the bank.
Which bank gives lowest interest on gold loan?
As per the table above, the lowest interest rates on gold loan is 7.00%. Punjab & Sind Bank offers the lowest interest rate of 7.00%.
Current Gold Loan Interest Rates as on 28 March 2021
Public Sector Banks offering Gold Loans
| Bank’s Name | Interest Rates | Loan Amount | Maximum Tenure | Processing Fee |
| State Bank of India | 7.50% p.a. | Rs.20,000 to Rs.50 lakh | 36 Months | 0.25% of the loan amount, Minimum Rs. 250 |
| Bank of India | 7.35% p. a. onwards | Up to Rs.25 lakh | Upto Rs.1 lakh: Nil, Over Rs.1 lakh: Rs.125 to Rs.300. | |
| Bank of Maharashtra | 7.35% p.a. | Upto Rs.20 lakh | 24 Months | Nil upto 31.03.2021 |
| Canara Bank | 7.65% p.a. | Rs.5,000 to Rs.20 lakh | 24 Months | 0.50% of the Loan amount, Minimum Rs.500 and Maximum Rs. 5,000 |
| Central Bank of India | 9.05% p.a. | Rs.20,000 to Rs.20 lakh | 12 Months | 0.50% of the loan amount |
| Bank of Baroda | 1 year MLCR + S.P p.a. onwards | Upto Rs.25 lakh | 12 Months | Up to Rs.3 lakh: Nil, Above Rs.3 lakh: Applicable charges. |
| Indian Overseas Bank | 7.05% p.a. onwards | Upto Rs.25 lakh | 36 Months | |
| Punjab & Sind Bank | 7.00% p.a. onwards | Rs.10,000 to Rs.20 lakh | 12 Months | Upto Rs.2 lakh: Rs.500, Above Rs.2 lakh: 0.50% subject to maximum Rs.10000. |
| Punjab National Bank | 8.75% p.a. onwards | Rs.25,000 to Rs.10 lakh | 12 Months | 0.75% of the loan amount, Minimum Rs. 500 and Maximum Rs.5000. |
| UCO Bank | 8.50% p.a. | 0.20% of the loan amount, Minimum Rs.250 and Maximum Rs.5000. | ||
| Union Bank of India | 7.20% p.a. onwards | Upto Rs.25 Lakh | 36 Months |
Private Banks offering Gold Loans
| Bank’s Name | Interest Rates | Loan Amount | Maximum Tenure | Processing Fee |
| Axis Bank | 12.50% p.a. onwards | Rs. 25,001 to Rs. 25 lakh | 36 Months | 1% of the loan amount |
| Bandhan Bank | 10.99% p.a. onwards | Minimum Rs.10000 | 36 Months | 1% of the loan amount |
| CSB Bank | 13.50% p.a. | 12 Months | ||
| City Union Bank | 8.00% p.a. onwards | Upto Rs.20 lakh | 12 Months | Nil to maximum Rs.750. |
| Dhanlaxmi Bank | 9.65% p.a. onwards | 1% of the loan amount | ||
| Federal Bank | 8.50% p.a. onwards | Rs.1,000 to Rs.1.5 crore | ||
| HDFC Bank | 9.50% p.a. onwards | Minimum Rs.10000 | 24 Months | 1% of disbursal amount |
| ICICI Bank | 11.00% p.a. onwards | Rs.10,000 to Rs.1 crore | 12 Months | 1.0% of loan amount |
| IndusInd Bank | 10.50% p.a. onwards | Upto Rs.10 lakh | 24 Months | 1.0% of loan amount |
| Karur Vysya Bank | 8.50% p.a. onwards | 12 Months | ||
| Kotak Mahindra Bank | 10.00% p.a. onwards | Rs.20,000 to Rs.1.5 crore | 48 Months | Upto 2% of Loan amount |
| South Indian Bank | 11.85% p.a. onwards | Rs.10,000 to Rs.10 crore | 12 Months |
NBFCs offering Gold Loans
| NBFC’s Name | Interest Rates | Loan Amount | Maximum Tenure |
| Muthoot Finance | 9.84% p.a. (inclusive of all charges) | Rs.1,500 to unlimited | 12 Months |
| Manappuram Finance Limited | 12.00% onwards | Rs.1,000 to Rs.1.5 crore | 12 Months |
The above data are collected from the respective bank’s or NBFC’s website on March 28, 2021. The above data of interest rates on gold loan is listed in ascending order based on the lowest interest rates. The data mentioned above are subject to change at the discretion of the bank/NBFC.
FAQs (Frequently Asked Questions)
1. What is the interest rate on gold loan?
The interest rate on gold loans starts from 7.00% per annum onwards.
Some Examples
- State Bank of India interest rates on gold loans is 7.50% per annum.
- Interest rates in Manappuram gold loan are 12.00% onwards.
- The interest rate on gold loan in Muthoot Finance is 9.84% p.a. (inclusive of all charges).
- The interest rate on gold loan in Bank of Baroda starts from 1-year MLCR + S.P p.a. onwards.
- Union Bank interest rates on gold loan are 7.20% p.a. onwards.
2. Which bank has lowest interest rate on gold loan?
Punjab and Sind Bank has lowest interest rates on gold loan, which is 7.00% per annum.
3. What is the interest rate on gold loan in Canara Bank?
Canara Bank interest rates on gold loans are 7.65% per annum.
4. What is the interest rate on gold loan in ICICI Bank?
ICICI Bank interest rates on gold loan start from 11.00% per annum.
5. What is the gold loan interest rate in HDFC Bank?
The interest rate on gold loan in HDFC Bank is 9.50% p.a. onwards.
Documents required for availing Gold Loan
Normally following documents required for availing of this loan:
1. Proof of identity such as PAN card, Aadhaar card, etc.
2. Proof of address like passport, Aadhaar card, Voter ID card, etc.
3. Passport size photograph
4. Any additional documents required may vary from lender to lender.
Final Thoughts
I hope now you know which bank offers lowest interest rates on gold loan. You can avail of gold loans by pledging gold articles such as gold jewelry, ornaments, bars, coins, etc. The interest rate on this loan is relatively lower than other types of loans. It ranges from 7.00% to 29% per annum. Note that the data given above is subject to change at the discretion of the bank/NBFC.
Also Read: SBI Gold Loan: Interest Rate, Features, Eligibility, and Processing Charges
Also Read: HDFC Bank Personal Loan: HDFC Personal Loan Interest Rates