Best Gold Loans Of 2024
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Gold is a popular choice for people looking to avail of a capital to fulfill various financial commitments. For this reason, public and private banks as well as regional rural banks offer Indian households, entrepreneurs and small businesses to avail of a capital up to 75% loan-to-value against the pledge of gold ornaments and jewelry as security.
Hence, interest rate becomes crucial as it determines the repayment capacity of borrowers to retrieve the gold. Such loans are expensive but unlike retail loans, it offers a low lending rate due to security pledged against the gold’s value.
Forbes Advisor India analyzed 33 gold loan products provided by major public and private sector banks of India. However, we do not have a five-star lender on our list. The weightage has been assigned as per gold loans given to both agriculture and non-agricultural end-users.
Here’s our list of top banks offering the best gold loan, along with how you can secure the lowest lending rates in 2023, eligibility and lending criteria.
The interest rate and account details are accurate as of Jan. 23, 2023.
- Best Gold Loans in 2024
- Central Bank of India
- State Bank of India
- Punjab and Sind Bank
- Punjab National Bank
- Bank of Baroda
- Canara Bank
- Indian Overseas Bank
- Tamilnad Mercantile Bank
- Axis Bank
- Summary: Best Gold Loans In 2024
- Methodology for Selecting the Best Gold Loan in India
- Gold Loan Interest Rates in 2024
- Factors That Can Influence Gold Loan Interest Rate
- Compare Gold Loan Interest Rates and Repayment
- 7 Smart Benefits of Taking A Gold Loan
Best Gold Loans in 2024
Central Bank of India: Best in gold loans with low interest rate.
State Bank of India: Best in gold loans with bullet repayment options of 3 and 6 months.
Punjab and Sind Bank: Best in short-term gold loans with low interest rates.
Punjab National Bank: Best in loan against sovereign gold bonds (SGBs) as well as gold jewelry and coins.
Bank of Baroda: Best in loan against gold with a minimum of 18 carat purity.
Canara Bank: Best in gold loan schemes for women borrowers.
Indian Overseas Bank: Best in gold loan for women borrowers with insurance add-on under PMSBY scheme.
Tamilnad Mercantile Bank: Best in short term gold loan amount as low as INR 3,000.
Axis Bank: Best in gold loan for borrowers who prefer fixed interest rate.
Central Bank of India
Personal Gold Loan RoI
8.45% to 8.55%
Gold Purity Scale
22 and 24 Carat
Personal Gold Loan RoI
8.45% to 8.55%
Gold Purity Scale
22 and 24 Carat
The Central Bank of India ranks top in Forbes Advisor India’s list of best gold loans in Jan. 2023, for its lowest lending rate against gold to Indian households at an interest rate of 8.45% for loans up to INR 3 lakh. It charges 8.55% RoI for loans up to INR 40 lakh. For businesses, the RoI ranges between 8.65% to 9.15% for loans up to INR 20 lakh.
The Cent gold loan is given to borrowers and businesses who pledge gold jewelry and coins issued by banks that are beyond 22 carat purity; however, loans given for personal use against 24 carat gold purity should not exceed 50 grams by weight.
Extra Details
Purpose: Personal and business use.
Loan type: Personal – demand loan; business – term loan, overdraft, and cash credit.
Tenure: Personal – 12 months; business – up to 36 months.
Processing fee: Personal – 0.5%; business – Nil up to INR 5 lakh.
Concession: NA.
Central Bank of India Gold Loan Interest Rate Range
- Low interest rates
- Nil documentation charge
- Non availability of gold loan takeover
State Bank of India
Personal Gold Loan RoI
8.60%
Gold Purity Scale
Subject to gold appraisal
Personal Gold Loan RoI
8.60%
Gold Purity Scale
Subject to gold appraisal
The State Bank of India (SBI) offers personal gold loans to individuals above 18 years of age, with bullet repayment options of 3 and 6 months. SBI is among banks that offer low rates of interest (8.55% to 8.70%) on personal gold loans with EMI up to 36 months, or avail of overdraft loan facility. The margin is collected in the range of 25% to 35% value of the loan amount, which is fixed as per the repayment option taken by the borrower.
Notably, SBI doesn’t charge a processing fee on its gold loans. However, borrowers have to pay gold appraiser charges for verifying the metal’s purity and quantity over and above the basic paperwork. The bank also offers home loans to borrowers against gold as collateral at an RoI of 8.70% for a tenure up to 12 months.
Extra Details
Purpose: Personal use.
Loan Type: Term loan, bullet repayment, overdraft.
Tenure: 3 and 6 months (bullet repayment); up to 36 months EMI option.
Processing fee: Nil up to March 30, 2023.
Concession: NA.
State Bank of India Gold Loan Interest Rate Range
- Low interest rates
- Nil processing fee
- Realty loan available against gold pledged as security
- Charges gold appraiser fees.
Punjab and Sind Bank
Personal Gold Loan RoI
8.60%
Gold Purity Scale
Subject to gold appraisal
Personal Gold Loan RoI
8.60%
Gold Purity Scale
Subject to gold appraisal
Punjab and Sind Bank offers short-term loans from INR 10,000 to INR 25 lakh against 65% to 75% loan-to-value ratio of the gold jewelry, ornaments and coins. The loan has a maximum repayment tenure up to 12 months with demand loan, term loan, and overdraft credit facilities payable on a monthly, quarterly and half-yearly basis. PSB gold loans come with an RoI of 8.60% and processing fee ranging from INR 500 to INR 10,000 which is fixed as per the loan amount.
Extra Details
Purpose: Productive and consumption use.
Loan type: Demand loan, term loan, and overdraft.
Tenure: Up to 12 months.
Processing fee: INR 500 to INR 10,000
Concession: NA.
Punjab and Sind Bank Gold Loan Interest Rate Range
- Low interest rates
- High processing fee
Punjab National Bank
Personal Gold Loan RoI
9%
Gold Purity Scale
Subject to gold appraisal
Personal Gold Loan RoI
9%
Gold Purity Scale
Subject to gold appraisal
Punjab National Bank offers loans against gold jewelry and coins as well as sovereign gold bonds (SGBs) issued by the RBI as the government of India stocks. Borrowers pledge their SGBs in favor of the bank, which are held in dematerialized form in demat account with NSDL as depository participant, and obtain a need-based finance starting INR 50,000.
PNB’s personal gold loan and loan against SGBs can be availed either as demand loan (bullet and EMI options) or overdraft credit facility subject to the purity and quantity of the gold over and above the basic paperwork. While personal gold loans come with a repayment tenure up to 12 months, loan against SGBs has a maximum eight years repayment tenure, and the amount is credited to the operative account of the borrower with the bank. It also offers demand loans against gold for agricultural purposes at an RoI of 8.10%.
Extra Details
Purpose: For individuals, HUFs, trusts, charitable institutions, and universities.
Loan type: Demand loan (bullet and EMI options), and overdraft.
Tenure: Up to 12 months on demand loans.
Processing fee: 0.30%, Nil on SGBs.
Concession: NA.
Punjab National Bank Gold Loan Interest Rate Range
- Availability of loans against SGBs.
- Nil processing charge on loans against SGBs.
- Non availability of gold loan takeover.
Bank of Baroda
Personal Gold Loan RoI
8.85%
Gold Purity Scale
18 Carat onwards
Personal Gold Loan RoI
8.85%
Gold Purity Scale
18 Carat onwards
Bank of Baroda offers loan against gold with a minimum of 18 carat purity upon an interest rate of 8.85% per annum. The repayment tenure for demand loan and overdraft facilities come with a tenure of 12 months and up to 36 months for EMI-based payments. Borrowers can choose to close the loan before the scheduled date without paying any pre closure or prepayment charges.
Bank of Baroda also provides cash credit and demand loans to individuals in agriculture businesses and allied activities upon an interest rate starting 8.50% per annum for a sum above INR 3 lakh to INR INR 50 lakh for a tenure up to 12 months.
Extra Detail
Purpose: Personal and for agricultural use.
Loan type: Demand loan, overdraft, EMI, and cash credit.
Tenure: 12 to 36 months.
Processing fee: Nil up to loans below INR 3 lakh.
Concession: NA
Bank of Baroda Gold Loan Interest Rate Range
- Availability of loans against 18 carat purity.
- Nil preclosure charges.
- Non availability of gold loan takeover.
Canara Bank
Personal Gold Loan RoI
9.15% to 9.50%
Gold Purity Scale
Subject to gold appraisal
Personal Gold Loan RoI
9.15% to 9.50%
Gold Purity Scale
Subject to gold appraisal
Canara Bank is among few banks which provides a concessional lending rate to women gold loan borrowers at 9.15% and 9.50% for other individuals. Borrowers can lend a minimum of INR 5,000 gold loan up to INR 35 lakh subject to purity and quantity of gold pledged as security. Besides gold ornaments and jewelry, the bank also accepts specially minted gold coins not exceeding 50 grams per customer.
Extra Details
Purpose: Personal gold loan.
Loan type: Single transaction limit (STL), overdraft.
Tenure: 6 months (Bullet payment), 12 months (STL), and up to 2 years (Overdraft).
Processing fee: 1%
Concession: Women gold loan borrowers get 0.50 bps concession on RoI.Canara Bank Gold Loan Interest Rate Range
Canara Bank Gold Loan Interest Rate Range
- Concessional lending rate to women borrowers
- Availability of bullet repayment option of six months
- Nil preclosure charges
- High processing fee
- Unavailability of gold loan takeover scheme
Indian Overseas Bank
Personal Gold Loan RoI
9.65% to 10.20%
Gold Purity Scale
18 Carat onwards
Personal Gold Loan RoI
9.65% to 10.20%
Gold Purity Scale
18 Carat onwards
Indian Overseas Bank offers loans against gold with a minimum of 18 carat purity for both agricultural and non-agricultural purposes. Apart from concessional rate to women gold borrowers, a free accidental insurance cover of INR 2 lakh is also awarded under the Pradhan Mantri Suraksha Bima Yojana (PMSBY) scheme to women beneficiaries. The bank doesn’t charge documentation and preclosure charges except a processing fee.
Extra Details
Purpose: Agricultural and non-agricultural purposes.
Loan type: Bullet payment and term loan.
Tenure: Six to 12 months on bullet repayment, and up to 36 months on term loans.
Processing fee: NA.
Concession: Women gold loan borrowers get concessions on RoI.
Indian Overseas Bank Gold Loan Interest Rate Range
- Concessional lending rate to women borrowers
- Availability of bullet repayment option
- Nil preclosure charges
- Unavailability of gold loan takeover scheme
Tamilnad Mercantile Bank
Personal Gold Loan RoI
9.15% to 9.40%
Gold Purity Scale
18 Carat onwards
Personal Gold Loan RoI
9.15% to 9.40%
Gold Purity Scale
18 Carat onwards
Tamilnad Mercantile Bank offers loans against gold with a minimum of 18 carat purity for both agricultural and non-agricultural purposes. It provides personal gold loans as low as INR 3,000 at an RoI between 9.15% to 9.40% for six and 12 months repayment tenure. However RM permission on loans above INR 10 lakh is required.
Besides, TMB charges fees for handling, inspection, safe-keeping, and appraisal charges on gold loans, which is however subject to deduction as per borrowers’ relationship with the bank. TMB’s agri gold loans come at an RoI of 8.90% for a tenure up to 12 months.
Extra Details
Purpose: Agri and non-agri purposes.
Loan type: Term loan.
Tenure: 6 and 12 months.
Processing fee: NA
Concession: NA
Tamilnad Mercantile Bank Gold Loan Interest Rate Range
- Bullet repayment of 6 to 12 months
- Handling, inspection, safe-keeping, and appraisal charges applicable
Axis Bank
Personal Gold Loan RoI
17% (Fixed RoI)
Gold Purity Scale
Subject to gold appraisal
Personal Gold Loan RoI
17% (Fixed RoI)
Gold Purity Scale
Subject to gold appraisal
Axis Bank provides gold loans for both agri and non-agri purposes upon a fixed rate of interest at 17%. It is one of the few scheduled commercial banks offering a fixed RoI on gold loans for a tenure starting six to 36 months, with flexible repayment options such as bullet repayment, EMI, or pay interest upfront and the principal amount later. Borrowers can also calculate loan amount based on the carat and weight of the gold ornaments on the bank’s official website.
Extra Details
Purpose: Agri and non-agri purposes.
Loan type: Term loan, overdraft.
Tenure: 6 to 36 months.
Processing fee: Nil to 0.50%
Concession: NA
Axis Bank Gold Loan Interest Rate Range
- Loan disbursal within 24 hours subject to approval
- Flexible repayment option
- Up to 2% preclosure charges applicable.
- Only fixed RoI applicable.
Summary: Best Gold Loans In 2024
Methodology for Selecting the Best Gold Loan in India
We scored 33 gold loan products offered by public and private sector banks of India across 13 data points in the categories of interest rates, credit facility, processing fee, loan terms, repayment option over and above basic eligibility criteria and ease of access to information on the lenders’ official website. We chose the nine best lenders based on those earning three stars and higher.
The following is the weighting assigned to each category:
– Interest rates: 30%
– Purpose: 20%
– Credit facility: 10%
– Processing fee/charges: 10%
– Concession to women borrowers: 10%
– Prepayment option: 5%
– Gold loan takeover: 5%
– Ease of access to application: 5%
– Customer support: 5%
Gold Loan Interest Rates in 2024
Interest rate in gold loans is crucial as it determines the repayment capacity of borrowers to retrieve the gold. Such loans are expensive but unlike retail loans, it offers a low lending rate due to security pledged against the gold’s value. Unlike retail loans, gold loans do not require guarantor, income proof or credit score, and can be easily converted into cash.
Gold’s rate as per its purity and weightage becomes crucial over and above basic paperwork to obtain a gold loan. Here are the interest rate on gold loans provided by major public and private sector banks of India:
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Punjab and Sind Bank
Bank of Baroda
Punjab National bank
State Bank of India
UCO Bank
Axis Bank
Bandhan Bank
CSB Bank
City Union Bank
Federal Bank
HDFC Bank
ICICI Bank
Karur Vysya Bank
Kotak Mahindra Bank
Nainital Bank
Indian Bank
Indian Overseas Bank
IndusInd Bank
South Indian Bank
Tamilnad Mercantile Bank
The above interest rates and details on gold loans are updated as on Jan. 23, 2023. While we update this information regularly, the rate of interest and loan details may have changed since the page was last updated.
Factors That Can Influence Gold Loan Interest Rate
When a borrower applies for a loan against their hallmarked gold ornaments with any public and private sector banks of India, a mandatory appraisal check is conducted over and above the purchase bill to determine the purity and weight of the metal to arrive at the gold loan amount one can borrow. A number of factors affect loan amount one receives on gold, including:
Gold weight: Gold loan amount is directly proportional to the weight of the gold.
Gold purity: While some lenders only provide loans on the basis of purity not less than 18 carat, some banks may offer loans only on the basis of purity after the appraisal check.
Fluctuation in gold prices: Lenders provide loans against gold as per the current market value on the basis of the metal’s purity scale. Any fluctuation on the market price of the gold will affect the lending amount.
Related: Gold Rate In India Today.
Compare Gold Loan Interest Rates and Repayment
The interest rates lending institutions post online only give an idea of what they offer, not an exact rate. Remember, a nominal GST charge is also levied, along with fees for processing, handling, safe-keeping, etc. Be sure to confirm the available RoI range and gold loan details and charges with your lender before applying for one.
Most public and private sector banks offer floating rate of interest while only a few, like Axis Bank, offer fixed RoI on gold loans. Up to 75% loan-to-value of the pledged gold ornaments that are hallmarked and specially minted gold coins can be obtained, while a few banks also offer loans against even sovereign gold bonds (SGBs). Remember, most banks refrain from lending against gold bullion bars.
Once you qualify for a gold loan over and above basic paperwork, financial institutions offer borrowers a flexibility to repay the principal and interest amount via credit facilities such as term loan, EMI, overdraft, or bullet repayment option.
How to Calculate Gold Loan Interest Amount?
The loan amount varies as per the purity scale (mostly above 18 Carat) of the gold ornament and coins. Banks then add their lending rate, which is directly proportional to the Reserve Bank of India’s (RBI) repo rate.
Gold is priced as per the current market value, and any fluctuation on the market price will affect the floating rate of interest rate on the lending amount while fixed interest rates on loans remain unchanged.
7 Smart Benefits of Taking A Gold Loan
– Guarantor is not required in gold loans.
– Easily convertible into cash.
– Income proof not required.
– Pricing not linked to CIBIL score.
– Minimal paperwork and faster processing.
– Credit is disbursed directly into the borrowers’ savings account.
– Borrowers’ gold is secured in a tamper-proof box inside the bank’s vault, which may attract extra fees.
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