Agold loan can be obtained quickly and easily with little to no paperwork and a low interest rate. Gold coins and jewelry can be pledged to avail of a gold loan.
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What is a Gold Loan?
The IDFC FIRST Bank website states, “A Gold Loan is a loan obtained by the borrower in exchange for gold jewellery (of 18-22 karats) as principal collateral. A Gold Loan is offered when you hand over your gold to a bank in exchange for a particular sum.
How much margin is required to take gold goan?
Margin vary depending on the bank. According to the SBI website, “Margin of 25% is to be maintained for loans repayable by way of EMIs. In case of Bullet Repayment Loan Scheme, margin is 35%. In case of 3 Months Bullet Repayment Gold Loan and 6 Months Bullet Repayment Gold Loan, margin is 30%.”
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Foreclosure charges
Charges depend on the bank, for example SBI does not charge, loans can be closed at any point of time without any foreclosure charges. HDFC Bank charges 1% on principal outstanding + applicable tax on premature closure charges (Full or Part payment). Axis Bank charges 2% for closure less than 6 months. For closure after 6 months banks will not charge for foreclosure.
Gold loan interest rate varies depending on the bank. Do note that many banks apply processing fee for releasing gold loan. Here is a list of bank interest rate range on gold loan.
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Latest gold loan interest rates, processing fee charged by top 24 banks
| Bank / NBFC | Gold Loan Interest Rate | Processing Fee | Last Update |
| Central Bank of India | 8.40% to 9.25% | 0.50% of loan amount | 8/29/2024 |
| Uco Bank | 8.50% | Rs.250 to 5000 max | 8/29/2024 |
| Indian Bank | 8.80% to 9.00% | 0.56% of the limit sanctioned | |
| Federal Bank | 8.99% onwards | 8/29/2024 | |
| ICICI Bank | 9.00% to 18.00% | 2% of loan amount | 8/29/2024 |
| Kotak Mahindra Bank | 9.00% to 24.00% | Upto 2% + GST | 8/29/2024 |
| SBI | 9.05% onwards | 0.50% + GST | 8/29/2024 |
| HDFC Bank | 9.10% to 17.90% | 1% of disbursal amount | 8/29/2024 |
| Bank of Baroda | 9.15% | Applicable charges + GST | 8/29/2024 |
| South Indian Bank | 9.20% – 22.00% | 8/29/2024 | |
| Punjab National Bank | 9.25% | 0.75% of loan amount | 8/29/2024 |
| Canara Bank | 9.25% | Rs.500 to Rs.5000 | 8/29/2024 |
| Union Bank | 9.25% to 9.85% | 8/29/2024 | |
| Bank of Maharashtra | 9.30% | Rs.500 to Rs.2000 + GST. | 8/29/2024 |
| Punjab & Sind Bank | 9.35% | Rs.500 to 10000 max | 8/29/2024 |
| City Union Bank | 9.50% | Nil | 8/29/2024 |
| AU Small Finance Bank | 9.50% to 24.00% | 1% + GST | 8/31/2023 |
| Indusind Bank | 10.35% to 17.05% | 1% of loan amount | 8/29/2024 |
| Bandhan Bank | 10.50% to 19.45% | 1% + GST | 8/29/2024 |
| Karur Vysya Bank | 10.65% | 0.50% (inclusive of Appraisal charges) | 8/29/2024 |
| Karnataka Bank | 10.68% | 8/29/2024 | |
| J & K Bank | 10.80% | Rs 500 + GST | 8/29/2024 |
| Axis Bank | 17.00% | 0.5% + GST | 8/29/2024 |
| Muthoot Finance | 22% p.a. with 2% rebate if 100% interest is paid monthly | 8/29/2024 |
Compiled by ETIG; data as on September 19, 2024.
