Gold loans: Banks that offer the lowest interest rates
Gold rush: HDFC Bank, Indian Bank offer the cheapest gold loans at interest rates of 8.5-8.65 percent per annum. A gold loan is given when customers pledge their gold with the bank.
The price of gold surged to a record high of Rs 66,000 per 10 grams this week on account of weak US economic data. It's a good time, per se, to sell your gold and reallocate your assets. Or even for those who wish to pledge their gold holdings to meet any emergencies. As per BankBazaar data, the lowest interest rate on gold loans is offered by a private bank, followed by seven public sector banks that charge interest rates of under 9.6 percent.
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Private sector major HDFC Bank levies an interest rate of 8.5 percent on a Rs 5 lakh gold loan with a tenure of two years. It’s the lowest interest rate on gold loans on offer among banks. The EMI (equated monthly installment) in this case will work out to Rs 22,568.
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Indian Bank offers an interest rate of 8.65 percent on a Rs 5 lakh gold loan with a tenure of two years. It amounts to a monthly installment of Rs 22,599.
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At 8.7 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 22,610 on a Rs 5 lakh gold loan with a tenure of two years.
Bank of India levies an interest rate of 8.8 percent on Rs 5 lakh gold loans with two-year tenures. You will have to shell out EMI of Rs 22,631 on such loans.
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Canara Bank and Punjab National Bank levy an interest rate of 9.25 percent on Rs 5 lakh gold loans with two-year tenures. Your EMIs will amount to Rs 22,725.
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Bank of Baroda levies an interest rate of 9.4 percent on a gold loan of Rs 5 lakh with a tenure of two years. Borrowers will have to pay an EMI of Rs 22,756.
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Public sector behemoth State Bank of India (SBI) offers an interest rate of 9.6 percent on a gold loan of Rs 5 lakh with a tenure of two years. Borrowers will have to pay an EMI of Rs 22,798.
ICICI Bank charges an interest of 10 percent on a gold loan of Rs 5 lakh with a tenure of two years. Borrowers will have to pay an EMI of Rs 22,882.
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Axis Bank levies an interest rate of 17 percent on a gold loan of Rs 5 lakh with a tenure of two years. Borrowers' EMIs will work out to Rs 24,376.
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The top 10 banks by secured loans have been considered for this list. Data has been collected from the banks' websites as of March 12, 2024. Banks are listed in ascending order, based on interest rates - the bank offering the lowest interest rate on gold loans (for various loan amounts) is at the top and the highest at the bottom. EMI is calculated based on 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 EMI calculation).
Hiral Thanawala is a personal finance journalist with over 10 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
