Punjab and Sind Bank, Bank of India offer the lowest rates on gold loans
IIFL Finance offers the cheapest gold loans among NBFCs, at 9.24 percent
July 22, 2021 / 03:24 PM IST
COVID-19 provided yet another opportunity for gold to prove its mettle as a reliable resource for Indians during times of crises. With the pandemic-induced lockdowns triggering financial crunch, for many families, mortgaging their gold holdings is the only way out. Families have had to part with their precious jewellery to pay for children’s education expenses, medical emergencies or other needs. However, higher gold prices and lower interest rates have cushioned the impact in monetary terms, making it relatively easier to raise funds.
Public sector banks (PSB) continue to top the list of lenders offering the cheapest interest rates on gold loans. Punjab & Sind Bank’s interest rates for a Rs 5-lakh gold loan with a tenure of three years start at 7 percent, as per data from Bankbazaar.com. It is followed by its PSB peer Bank of India (BOI) with 7.3 percent. The country’s largest bank, the State Bank of India (SBI), charges 7.5 percent for such gold loans.
Non-banking financial companies, that are highly active in this space, offer interest rates ranging from 9.24 percent to 12 percent. IIFL Finance is the cheapest of the lot with 9.24 percent. Muthoot, Bajaj Finserv and Manapuram Finance charge 11.9 percent, 11.99 percent and 12 percent respectively.
A note on the table
Interest rate on gold loans for all listed (BSE) public and private sector banks and selected NBFCs have been considered for data compilation. Banks for which data is not available on their websites, have not been considered. Data collected from respective banks’ websites as on July 8, 2021. Banks are listed in ascending order on the basis of interest rate – that is, bank/NBFC offering lowest interest rates on gold loan (for various loan amounts) is placed at top and highest at the bottom. Lowest rate offered by the banks/NBFC has been considered in the table. EMI is calculated on the basis of Interest rate mentioned in the table for a Rs 5-lakh loan with tenure of three years (processing and other charges are assumed to be zero for EMI calculation).