Gold loans: Banks and NBFCs that offer the lowest interest rates

The price of gold crossed the Rs 60,000 mark for 10 grams in late March on the back of the banking crisis in the US. It is now hovering around Rs 59,600, a lucrative proposition for those looking to liquidate idle gold assets and also those who wish to mortgage gold holdings to meet critical needs. As per BankBazaar.com data, public sector banks charge the lowest interest rates on gold loans, with at least five of them offering rates under 9 percent.

The state-owned Central Bank of India offers an interest rate of 8.45 percent on a Rs 5-lakh gold loan with a tenure of two years. It amounts to a monthly instalment of Rs 22,716.

At 8.65 percent, Union Bank of India is next on the list of cheapest gold loan lenders. The EMI in this case will work out to Rs 22,762.

With an interest rate of 8.8 percent, this public sector bank is third on the list of cheapest gold loan lenders. The EMI will amount to Rs 22,797.

This public sector bank levies an interest rate of 8.85 percent on Rs 5-lakh gold loans with two-year tenures. You will have to shell out EMI of Rs 22,808.

Another government-run bank, Indian Bank, charges an interest rate of 8.95 percent. The EMI on a Rs 5-lakh gold loan with a tenure of two years will amount to Rs 22,831.

Public sector major Bank of Baroda offers an interest rate of 9.15 percent on a gold loan of Rs 5 lakh with a tenure of two years. Borrowers will have to pay an EMI of Rs 22,877.

At 9.25 percent, Punjab National Bank is the seventh bank on the list of cheapest lenders. The EMI on a Rs 5-lakh loan with a tenure of two years will amount to Rs 22,900.

Another state-managed bank, it offers an interest rate of 9.3 percent on a Rs 5-lakh loan with a two-year tenure. The borrower will have to pay an EMI of Rs 22,911.

This bank charges an interest of 9.49 percent on gold loans of Rs 5 lakh with tenures of two years. The EMI will be Rs 22,955 in this case.

The only NBFC on this list, Bajaj Finserv levies an interest of 9.5 percent on such gold loans. The borrower will have to pay an EMI of Rs 22,957 on a Rs 5-lakh loan with a two-year tenure.

Interest rates on gold loans for all listed (BSE) public and private banks as also select NBFCs have been considered for the data compilation. Banks for which data is not available on their websites have not been considered. Data has been collected from the banks' websites as on April 4, 2023. Banks are listed in ascending order, on the basis of interest rates - the bank/NBFC offering the lowest interest rate on gold loans (for various loan amounts) is at the top and the highest at the bottom. The lowest rate offered by the banks/NBFCs has been considered in the table (irrespective of the loan amount). EMI is calculated on the basis of the interest rate mentioned in the table for a Rs 5-lakh loan with a tenure of two years (processing and other charges are assumed to be zero for the purpose of EMI calculation).