Punjab & Sind, Canara Bank offer the lowest rates on gold loans
Interest rates range from 7-8.75 percent
August 31, 2021 / 04:33 PM IST
Gold loan portfolios of banks and non-banking financial companies may have seen a spike in non-performing assets, but the going continues to be good for borrowers.
Lenders continue to offer gold loans at economical rates thanks to the benign interest rate environment in the country. While NBFCs are aggressive in the segment, public sector banks lead the charge when it comes to providing cheapest loans.
Punjab & Sind Bank is far ahead of the pack with interest rate of 7 percent for a gold loan of Rs 5 lakh with a three-year tenure. India’s largest lender State Bank of India offers an interest rate of 7.5 percent. In contrast, NBFCs’ interest rates are upwards of 9.48 percent, which IIFL Finance offers. It is followed by NBFCs that charge substantially higher rates - Bajaj Finserv (11 percent), Muthoot Finance (11.9 percent) and Manappuram Finance (12 percent).
A note on the table:
Interest rates 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 August 12, 2021. Banks are listed in ascending order on the basis of interest rate, that is, bank/NBFC offering lowest interest rate on gold loan (for various loan amounts) is placed at top and highest at the bottom. Lowest rate offered by the banks/NBFCs is taken into account in the table. EMI is calculated on the basis of Interest rate mentioned in the table for Rs 5-lakh loan with a tenure of three years (processing and other charges are assumed to be zero for EMI calculation).