The festive season brings a plethora of offers from banks and non-banking financial companies (NBFCs) on loans. Several lenders have already rolled out ‘special offers,’ promising concessional processing fees and interest rates on home, auto and gold loans, among others.
Cheaper gold loans
NBFCs such as Muthoot Finance and Manappuram Finance are generally at the forefront of promoting gold loans. But unsurprisingly, it’s the banks that offer the best deals. The gap in the interest rates offered is substantially wide. State-owned lender Punjab and Sind Bank’s gold loans start at 7 per cent per annum, the cheapest on offer, with the EMI working out to Rs 15,439. Next on the list is Bank of India, which offers an interest rate of 7.35 per cent per annum, as per data from Bankbazaar. It is followed by the country’s largest lender, State Bank of India (SBI), which charges 7.5 per cent. For a Rs 5-lakh gold loan, the EMIs work out to Rs 15,519 and Rs 15,553 respectively. Barring Karnataka Bank and Federal Bank, other banks on the top ten list are public sector banks.
Amongst NBFCs, IIFL Finance offers the cheapest gold loan, starting at 9.24 per cent. Muthoot Finance levies interest rate of 11.90 per cent, followed by Bajaj Finserv (12 per cent) and Manappuram Finance (12 per cent).
A note on the table
Interest rates and charges on gold loans for all listed (BSE) public and private banks and selected NBFCs are considered for data compilation; Banks for which data is not available on their website, are not considered. Data collected from respective banks’ websites as on October 21, 2020. Banks are listed in ascending order on the basis of interest rate i.e. bank/NBFC offering lowest interest rate on gold loan (for various loan amount) is placed at top and highest at the bottom. Lowest rate offered by the banks/NBFC is considered in the table. EMI is calculated on the basis of interest rate mentioned in the table for Rs 5 lakh loan with tenure of three years (processing and other charges are assumed to be zero for EMI calculation)
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