Gold loans: These banks offer as little as 8.8% interest
Loan against gold: Bank of India, Indian Bank and Bank of Baroda offer interest rates between 8.8 and 9.15 percent on a gold loan of Rs 5 lakh for a tenure of one year.
The price of gold surged to a record high of Rs 75,000 per 10 grams. Rising gold prices have led to an increase in the size of gold loans. Customers with higher gold holdings have been known to monetise their jewellery. Gold loans have emerged as a popular financing option for those who wish to pledge their gold holdings to meet any emergencies.
Unlike traditional loans, gold loans score because they are against a collateral. Hence, it's available to a wide array of borrowers due to their minimal requirements. The borrower gets a loan up to 75 percent of gold value. Additionally, the process is relatively quick, with funds often disbursed within a day or two of submitting the necessary documentation and collateral.
Here are 10 banks which offer gold loans starting at 8.8 percent interest rates on a Rs 5 lakh loan with a tenure of one year, as per data compiled by BankBazaar.
2/9
Bank of India levies an interest rate of 8.8 percent on a Rs 5 lakh gold loan with a tenure of one year. It’s the lowest rate on gold loans on offer among banks. The EMI (equated monthly installment) in this case will work out to Rs 43,360.
3/9
Indian Bank offers an interest rate of 8.95 percent on a Rs 5 lakh gold loan with a tenure of one year. It amounts to a monthly installment of Rs 43,390.
4/9
Canara Bank, HDFC Bank and ICICI Bank levy an interest rate of 9 percent on Rs 5 lakh gold loans with one year tenure. Your EMIs will amount to Rs 43,400.
Bank of Baroda levies an interest rate of 9.15 percent on a gold loan of Rs 5 lakh with a tenure of one year. Borrowers will have to pay an EMI of Rs 43,430.
6/9
Union Bank of India and Punjab National Bank charges an interest of 9.25 percent on a gold loan of Rs 5 lakh with a tenure of one year. Borrowers will have to pay an EMI of Rs 43,450.
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 43,615.
8/9
Axis Bank levies an interest rate of 17 percent on a gold loan of Rs 5 lakh with a tenure of one year. Borrowers' EMIs will work out to Rs 44,965.
The top 10 banks by secured loans have been considered for this list. Data has been collected from the banks' websites as of July 17, 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 one year (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.
