Gold Loan Interest Rates | Banks are charging record interest rates on gold loans – Check out the top five deals

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Gold loan interest rates

New Delhi: A gold loan is the best option for raising funds to meet emergency cash needs such as hospitalization. The best thing about the gold loan is that you don’t need a good credit score or proof of income to avail it. Anyone over the age of 18 can avail a gold loan without any hassle. Banks and Non-Banking Financial Companies (NBFCs) offer gold loans.

This loan is one of the cheapest and easiest options for getting cash immediately. As gold loans are secured by physical gold or household gold, lenders generally do not require a high credit score to sanction this loan. Moreover, the time required to disburse a gold loan is very short. Here are some salient features of gold lending:

1) Mandate: Typically, gold loans are issued for terms of up to 2 years and after that term you can renew the loan.

2) Warranty: When lending gold, you must hold the gold (in whatever form, i.e. jewellery, bullion or coins) as collateral. Banks offer up to 80% of the gold’s value as a loan. The higher the loan-to-value ratio, the higher the interest rate will be.

3) Refund: Banks offer flexible repayment options. You can either opt for the EMI option or opt for the reimbursement in fine. A partial refund is also available in case of gold loan.

4) Credit score: To avail gold loans, you do need to have a good credit history. But if you have a good credit history, you can avail a gold loan at cheaper rates.

5) Documents: The documents required to qualify for a gold loan are also very few. You only need proof of identity and address as well as a PAN card to qualify for this loan.

6) Interest rate: As the gold loan is a secured loan, the interest rate is much lower than that of a personal loan, which is an unsecured loan. Currently, personal loans are available at interest rates between 10-15% depending on your job profile and credit score. But gold loans can be availed at an interest rate starting from 7%. Here are the top five banks that currently charge the lowest interest rate on gold loans.

Bank name Interest rate

Bank of Punjab and Sindh 7.00%

Union Bank 7.20%

Bank of India 7.35%

State Bank of India 7.50%

Canara Bank 7.65%

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