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Gold Loan Interest Rates 2024: Lowest Gold Loan Interest Rate in India

By Mayashree Acharya

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Updated on: Jun 6th, 2024

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13 min read

Apart from personal loans, Indian banks and financial institutions provide different types of financing options with relatively lower interest rates that can suit your feasibility. One major form is gold loans, involving pledging or using collateral to finance personal expenses like weddings, education, or business ventures.

In this article, we will walk you through a comprehensive guide on gold loans while highlighting the applicable gold loan interest rates of different banks.

What Is the Gold Loan Interest Rate? 

Generally, gold loan interest rates in India vary from 8% to 26% per annum. The total interest and the principal are calculated based on this rate. Borrowers have the flexibility to repay the interest over their chosen loan tenure, either through small instalments or as a lump sum. 

Eligibility for Gold Loan

The eligibility criteria set for a gold loan can vary from one lender to another. Therefore, it is advisable to check such criteria outlined on the lender's website before initiating the application for a gold loan.

Here are some eligibility criteria commonly set by most lenders in India for gold loans

  • An applicant should be 18 years of age or above.
  • He/she must pledge gold ornaments or articles as security against the loan. 
  • The applicant should pledge gold of 18 carats or above as security. 

Documents Required to Apply for Gold Loan

The list of documents required at the time of applying for a gold loan varies, depending upon the lender’s terms and conditions. Take a look at the following documents that are generally needed for a gold loan

  • Duly filled and signed gold loan application form.
  • Latest passport-size photographs of the applicant.
  • PAN card or Form 60.
  • Proof of Identity (Aadhaar card, Voter ID card, driving licence, etc).
  • Proof of Address (Passport, utility bills, rental agreement, etc).
  • Age Proof (Birth certificate or school passing certificate).
  • Signature proof.
  • Other post-loan disbursement documents (if required).

Gold Loan Processing Fee and Loan Appraiser Charges

Take a look at the following table to find out the applicable processing fees and loan appraiser charges of different leading banks in India:

Name of the Bank Processing Fee & Appraiser Charges 
SBI Gold LoanRs. 200 + GST in case of 3 months Bullet Repayment Gold Loan
Rs. 300 + GST in case of 6 months Bullet Repayment Gold Loan
0.50% of loan amount subject to minimum Rs. 500 and maximum Rs. 10,000 + GST in case of 12 months Bullet Repayment Gold Loan
0.50% of loan amount subject to minimum Rs. 500 + applicable GST in case of EMI-based Gold Loan
HDFC Gold LoanUp to 1% of disbursal amount (inclusive of applicable tax)
Axis Gold LoanRs. 300/Case in case of fresh loan up to Rs. 3 lakh 
0.5% of the loan amount in case of a renewed loan of more than Rs. 2 lakhs 
Canara Gold Loan0.50% of the loan amount with a minimum of Rs.500 and a maximum of Rs.5,000 in the case of the Swarna Overdraft gold loan 
Rs. 2,750 in case of MSME and Agricultural Gold Loan Schemes amounting to more than Rs. 10 lakh
BOB Gold LoanNIL up to Rs. 3 lakhs 
Applicable as per bank’s terms and conditions along with GST in case of loan amount above Rs. 3 lakh up to Rs. 50 lakhs
Karnataka Bank Gold LoanNo limit specified 
PNB Gold Loan0.30% of loan amount + GST or Rs. 500 + applicable tax, whichever is higher
Kotak Gold LoanUp to 2% of loan amount + applicable GST
Federal Gold LoanUp to 3% of loan amount + applicable GST
Central Bank of India0.50% of the loan amount, subject to a minimum of Rs. 250 and a maximum of Rs. 5,000
Indian Bank Gold LoanNIL 
IDBI Bank Gold Loan1%
IndusInd Bank Gold Loan1% of the loan amount + GST

Factors Influencing Gold Loan Interest Rates

Here are some of the factors that influence the interest rates for gold loans offered by prominent banks and financial institutions in India.

  • Monthly Income 

While processing a gold loan request, the lender takes into account the applicant's monthly income. When you earn a stable income, the bank or financial institution becomes more assured of your capacity to repay the loan. This subsequently leads to a lower interest rate charged against your gold loan.

  • Gold Market Rate 

As per the Reserve Bank of India, the Loan to Value (LTV) ratio for gold loans is 75%. This ratio denotes the maximum loan amount that banks can provide based on the value of the pledged gold. If the current gold market rate is high, the value of the articles you pledge against your gold loan will also be high. In this case, lenders offer lower interest rates since less risk will be involved. 

  • Principal Loan Amount 

The amount of loan you request from a lender determines the rate of interest against which your gold loan will be charged. You will be liable to pay higher interest if you want to avail a higher loan amount. Therefore, all borrowers need to assess their loan requirements before applying for a gold loan. 

  • External Benchmark Lending Rates 

All gold loans facilitated by Indian banks are linked with an external benchmark, be it the RBI repo rate or the 10-year government bond rate. The interest rates on gold loans are subject to change when the Reserve Bank of India or the Government of India adjusts its policy rates. If there is an increase in the policy rates, the gold interest rate will also increase. 

  • Credit Score 

As an eligibility criterion, a lender in India considers your creditworthiness, defined by the CIBIL score, while sanctioning a gold loan. A borrower with a good credit score is more likely to qualify for lower interest rates. A good credit score, representing a good repayment history, assures a lender that you will repay the loan amount without any hassle. 

Gold Loan Interest Rate Provided by Top Banks in India 2024 

Here is a table highlighting the rate of interest charged against the gold loan provided by top banks in India, along with the loan amount and tenure:

Name of the BankInterest Rate Loan Tenure 
SBI Gold Loan8.70% p.a.Up to 36 months
HDFC Gold Loan11% p.a. to 16% p.a.3 months to 24 months
Axis Gold Loan17% p.a. onwards6 months to 36 months
Canara Gold Loan9.60% p.a.12 months - 24 months
BOB Gold Loan9.15% p.a. onwards12 months to 36 months
Karnataka Bank Gold Loan9.33% p.a. and 11.30% p.a.6 months to 12 months
PNB Gold LoanUp to 9.25% p.a.As per the lender's terms and conditions
Kotak Gold Loan8% p.a. to 24% p.a.Up to 4 years
Federal Gold Loan8.99% p.a. onwardsAs per the lender's terms and conditions
Central Bank of India8.45% p.a. to 8.55% p.aUp to 12 months
Indian Bank Gold Loan8.65% p.a. to 10.40% p.a.Up to 12 months
IDBI Bank Gold LoanAt the discretion of the bank3 months – 36 months
IndusInd Bank Gold Loan9.60% - 16.00%Up to 12 months

Comparison of Gold Loan Interest Rates Provided by Top Non-Banking Institutions in India

Given below is a comparative outline of varying gold loan interest rates provided by different financial institutions in India other than leading banks:

Name of the Lender Interest Rate Tenure 
Bajaj Finserv12.99% onwards1 month -36 months
CASHe33% to 36%As per the lender's terms and conditions
Indiabulls13.99% onwardsAs per the lender's terms and conditions
Muthoot Finance12%-27%7 days to 36 months
TATA Capital10.99% onwardsAs per the lender's terms and conditions
IIFL9.24%-24%3 months-11 months
Manappuram Finance14%-29%3 months

Best Gold Loan Interest Rate

The best bank for a gold loan varies for different individuals, depending on their financial requirements and preferences. Take a look at the following table to find out why the gold loan interest rate offered by some leading Indian banks is considered the best:

BanksParticulars
Central Bank of IndiaBest for offering the lowest gold interest rate in India 
Axis BankIdeal for borrowers who are seeking a fixed interest rate against their gold loan 
State Bank of IndiaKnown for offering bullet repayment options of 3 and 6 months
Tamilnad Mercantile BankBest suited for individuals looking for short-term loans, with the loan amount starting from Rs. 3,000
Punjab National BankRenowned for providing the best financing options against both sovereign gold bonds (SGBs) and other forms of gold assets including jewellery and coins
Indian Overseas BankIdeal for women borrowers, seeking for insurance add-on under the PMSBY scheme
Bank of BarodaOffers best loan interest rate against 18-carat purity gold

Gold Loan Interest Rate Calculator

A gold loan calculator is a financial tool readily accessible online that computes the approximate value of the loan amount you can avail. It can also determine the amount of interest you will be liable to pay against a gold loan, along with the monthly EMI amount. This tool proves to be valuable for borrowers planning to apply for a gold loan, offering them an estimate of their repayment liability.

How to Calculate Gold Loan Interest Rate?

The interest amount payable on a gold loan, as determined by the interest rate, can also be calculated using a mathematical formula. Let us now discuss this formula with the help of an example. 

P x R x (1+R)^N / [(1+R)^N-1]

In this case, P = Principal loan amount, N = Tenure of the gold loan in months and R = Applicable rate of interest. 

Suppose you want to avail a gold loan of Rs. 1 lakh from a leading bank in India, charging 7.2% interest for 3 years. 

By incorporating the values into the formula, you will find that 

The amount payable = 1,00,000 * 0.006 * (1 + 0.006)36 / ((1 + 0.006)36 – 1) = Rs. 1,11,487

Gold Loan Maximum and Minimum Limit

Here is a detailed overview of the maximum and minimum limit of loan amounts you can sanction from the leading Indian banks and financial institutions:

Bank/Financial InstitutionMinimum Amount Maximum Amount 
HDFC BankRs.10,000Rs.5 crore
ICICI BankRs.10,000Rs.5 crore
SBI Bank Rs.20,000Rs.50 lakh
Yes BankRs.10,000Rs.5 crore
Canara BankRs.5,000Rs. 50 lakh
Axis BankRs.10,000Rs.5 crore
Bank of BarodaNo limit specified Rs.50 lakh
Karnataka BankNo limit specified Rs.25 lakh
Punjab National Bank Rs.25,000Rs.25 lakh
Kotak Bank Rs.20,000Rs.1.5 crore
Federal Bank Rs.1,000Rs.1.5 crore
Central Bank of IndiaRs.10,000Rs.40 lakh
Indian BankRs.25,000Rs.10 lakh
IDBI BankRs.10,000Rs.50 lakh
IndusInd Bank No limit specified Rs.20 Lakh
Bajaj FinservNo limit specified Rs.25 lakh
IndiabullsRs.1,000Rs.15 lakh
Muthoot FinanceRs.1,500No maximum limit (Varies from plan to plan)
TATA CapitalRs.75,000Rs.25 lakh
IIFLNo limit specified Up to 75% of the market value of your gold
Manappuram FinanceRs.1,000Rs.1.5 crore
CASHeRs.9,000Rs.3 lakh

How to Apply for a Gold Loan? 

You can easily apply for a gold loan, either through online or offline mode. However, before proceeding with the application process, it is in your best interest to seek out lenders offering low-interest rates and flexible terms and conditions. Moreover, you must also check the eligibility criteria and documentation requirements before applying. 

Following this, you can move forward with the application process as outlined below:

Online 

The following is a step-by-step guide on how to apply for a gold loan online. 

Step 1: Visit the official website of your desired lender. 

Step 2: Navigate to the ‘Gold Loan’ section under ‘Loan Products’. 

Step 3: Look for the ‘Apply Now’ tab on the ‘Gold Loan’ page and click on it. You will be redirected to a new page displaying an application form. 

Step 4: Fill it up carefully with all the required details. 

Step 5: Click on the ‘Submit’ tab after verifying. 

Offline 

In case your lender does not provide an online application facility, you will have to apply for a gold loan through the offline mode. Here is a stepwise process you need to follow with due diligence for doing so. 

Step 1: Visit the nearest branch of your preferred lender, along with the required documents. 

Step 2: Consult with a branch representative and obtain a gold loan application form. 

Step 3: Fill up the form with accurate details and attach the supporting documents with it. 

Step 4: Submit it to the branch representative. 

Once you go through the above-mentioned steps, your gold loan application request will be processed. Upon successful processing and verification, you will be sanctioned a gold loan. 

How to Close a Gold Loan? 

There are 4 ways of closing a gold loan. Let us discuss these methods in detail.

  1. By paying the interest amount as EMI and the principal amount 

Under this method, borrowers are allowed to pay the amount of interest in small instalments or EMIs throughout the loan tenure. On the other hand, the principal loan amount is payable at the end of the tenure in a single lump sum payment. 

  1. By paying regular EMIs

This method involves repayment of both the principal loan amount and the amount of interest as EMIs throughout the tenure every month. It is an ideal way of repayment for salaried borrowers or individuals with a fixed monthly income. 

  1. By making bullet repayment 

In this method, an individual is required to pay the entire principal amount along with interest in one lump sum at the end of the loan tenure instead of making small periodic payments. This method offers borrowers flexibility, especially those whose income varies throughout the year. 

  1. By making partial payments or foreclosure 

The partial payment method allows individuals to close their gold loan before the tenure by paying off the entire loan amount along with the interest. By doing so, you can significantly save on your interest payments. It is suitable for those financially secure individuals to repay their loan ahead of schedule and claim back the pledged gold articles. 

Although an attractive funding option, it is advisable for all borrowers to check for the lowest gold loan interest rate and flexible terms and conditions while considering loans against their gold articles. Moreover, it is equally important to consider one’s financial standing to repay the loan before prioritising an option. 

Other Banks Gold Loan Interest Rates:
1. ICICI Bank Gold Loan Interest Rate
2. HDFC Gold Loan Interest Rate 
3. Bank of Baroda (BOB) Gold Loan Interest Rate
4. Canara Bank Gold Loan Interest Rate
5. SBI Gold Loan Interest Rate
6. Axis Bank Gold Loan Interest Rate
7. Central Bank Gold Loan Interest Rate
8. PNB Gold Loan Interest Rate
9. Union Bank Gold Loan Interest Rate
10. Indian Overseas Bank (IOB) Gold Loan Interest Rate

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Frequently Asked Questions

Which bank has the lowest gold loan interest?

Kotak Mahindra Bank offers the lowest gold loan interest rate, starting from 8%. 

What is the interest of a Rs. 1 lakh gold loan?

The rate of interest on a loan against Rs. 1 lakh gold ranges between 8% to 24%, or even higher, depending on factors such as prevailing economic conditions or the type of lender. 

Can we get a 100% gold loan?

No, it is not possible to avail a 100% gold loan. An individual can obtain a loan of up to 75% of the current market value of their gold in India. 

What are the limitations of a gold loan?

Although an appealing financing option, there are some risks associated with a gold loan. One key limitation of such a loan is the possibility of the lender freezing your pledged articles and selling them off in an auction to release the outstanding loan amount in the event of default.

What is the highest amount for a gold loan?

In India, the highest amount for a gold loan is Rs. 1.5 crore. 

What is the maximum gold loan amount in SBI?

The maximum loan amount provided by the State Bank of India against gold is Rs. 50 lakhs.

What is the interest rate for agricultural gold loans?

The interest rate on agricultural gold loans offered by leading financial institutions is 7%. 

How to calculate the interest rate for a gold loan?

The interest on a gold loan can be easily determined by either using an online calculator or a mathematical formula. 

How can I check my SBI gold loan status?

You can track your SBI gold loan status by visiting the official website of the State Bank of India. For this, you need to specify your reference number and mobile number along with your ISD code.

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About the Author

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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Quick Summary

Indian banks offer various financing options besides personal loans including gold loans. Interest rates vary and depend on factors like income, gold market rate, principal loan amount, and credit score. Eligibility criteria for gold loans are typical, and documents needed may vary. Different banks have varying processing fees and appraisal charges. Different banks offer different interest rates for gold loans; online and offline application processes are available, and borrowers can close gold loans through different methods.

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