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Since the beginning, Indians have a strong affinity towards gold. Also, as per historical data, gold has proved to be the best hedge against Inflation. India imports 25%-30% of gold production. Many banks and institutions offer gold loans with effective interest rates. In this article, you'll understand the important aspects of gold loan, top banks Offering gold loans, gold loan interest rates, eligibility and procedure to apply for gold loan, etc.
A gold loan is a secured loan in which an individual pledges their gold ornaments or coins to a lender in exchange for funds. The loan amount is usually a percentage of the gold's value, and the borrower has to pay interest on the loan amount. The loan tenure typically ranges from a few months to a few years, and the borrower has to repay the loan amount along with interest within the stipulated time. Gold loans are popular in India as they provide quick and hassle-free access to funds, especially for those who may not have a good Credit Score or other assets to pledge as Collateral.
The gold loan Industry in India continues to flourish, driven by rising gold prices and increasing demand for quick and hassle-free access to funds. With the Reserve Bank of India (RBI) easing the loan-to-value ratio for gold loans, more lenders have entered the Market, increasing competition and attractive interest rates for borrowers. Moreover, the digitalisation of the gold loan process has made it easier for individuals to avail of gold loans from the comfort of their homes. The industry is expected to continue its growth trajectory, aided by the increasing financial awareness and need for emergency funds.
Here is the list of top banks and financial institutions offering gold loans in India -
Name of the Bank | Interest Rate | Loan Amount |
---|---|---|
Axis Bank Gold Loan | 13.50% p.a.to 16.95% p.a | Rs.25,001 to Rs.25 lakhs |
Bank of Baroda Gold Loan | 8.85% p.a. onwards | Up to Rs.50 lakhs |
Bank of India Gold Loan | 7.80% to 8.95% per annum | Up to Rs.50 lakhs |
Bank of Maharashtra Gold Loan | 7.10% p.a. | Up to Rs.20 lakhs |
Canara Bank Gold Loan | 7.35% p.a. | Rs.5,000 to Rs.35 lakhs |
Federal Bank Gold Loan | 8.89% p.a. onwards | Up to Rs.10 lakhs |
HDFC Bank Gold Loan | 11% p.a. to 16% p.a. | Rs.10,000 onwards |
IDBI Bank Gold Loan | 5.88% per annum | Up to Rs. 1 crore |
IIFL Bank Gold Loan | 6.48% p.a. - 27% p.a. | Rs.3,000 onwards |
IOB Gold Loan | 5.88% per annum | Up to Rs. 1 Crore |
Indian Bank Gold Loan | 8.95% - 9.75% | Up to Rs. 1 Crore |
Indulsnd Bank Gold Loan | 11.50% p.a. - 16.00% p.a. | Up to Rs.10 lakhs |
Karnataka Bank Gold Loan | 11.00%p.a. | Up to Rs. 50 lakhs |
Kotak Mahindra Gold Loan | 10.00% p.a. - 17.00% p.a. | Rs.20,000 to Rs.1.5 crore |
KVB Gold Loan | 8.05% - 8.15% | Up to Rs. 25 lakhs |
Manappuram Gold Loan | 9.90% p.a. to 24.00% p.a. | As per the requirement of the scheme |
Muthoot Gold Loan | 12% p.a. to 26% p.a. | Rs.1,500 onwards |
PNB Gold Loan | 7.70% p.a. to 8.75% p.a. | Rs.25,000 to Rs.10 lakhs |
SBI Gold Loan | 7.00% p.a. onwards | Rs.20,000 to Rs.50 lakhs |
Union Bank Gold Loan | 8.65% p.a. to 10.40% p.a. | As per the requirement of the scheme |
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An individual can avail a gold loan for various needs such as educational purpose, vacation, medical emergencies, and so on
Gold itself acts as collateral against the loan
Ideally, the loan tenure falls between 3 months to 3 years. But again, it may vary bank to bank
Processing fees, late payment charges/fine for non-payment of the interest are some of the terms applicable for gold loan. So ensure you know all the terms of the loan before applying
There are mainly three options where the lender can offer the customer for repaying the gold loan. They are-
Sometimes the option of discount is offered by the lenders at the prevailing interest rate on the gold loan. This is if the customer repays the interest on time, then 1% -2% discount might be offered from the original rate of interest.
Opting for a gold loan can be beneficial in many ways, including:
The eligibility criteria for gold loan differs from bank to bank. The following are some of the general terms of the gold loans-
While applying for the loan, you will be given a form which you need to fill with proper details. Following, you need to submit certain documents mentioned below-
To apply for a gold loan in India, you can follow these steps:
Choose a lender: Choose a lender that suits your requirements. It is important to note that the interest rate, loan amount, and loan tenure may vary from lender to lender. Therefore, do thorough research and compare different lenders before choosing one
Check eligibility criteria: Each lender has different eligibility criteria for gold loans. You can check the lender's website or visit the nearest branch to know the eligibility criteria
Gather required documents: You will need to provide documents such as identity proof, address proof, and proof of ownership of the gold
Visit the lender's branch: Visit the nearest branch of the lender and carry the gold that you want to pledge. The lender will evaluate the gold and determine its value
Fill the application form: Fill the application form provided by the lender with all necessary details such as personal details, loan amount, loan tenure, etc
Submit the documents: Submit the required documents along with the application form
Sign the agreement: After the loan is approved, sign the loan agreement and provide the necessary authorization to the lender
Receive the loan amount: Once the loan agreement is signed, the loan amount will be disbursed to your bank account or provided to you in the form of a cheque.
Gold Mutual Funds is a variant of Gold ETFs. A gold ETF (Exchange Traded Fund) is an instrument that is based on gold price or invests in gold bullion. A gold ETF specialises in Investing in a Range of gold securities. Gold Mutual Funds do not directly invest in physical gold but take the same position indirectly by Investing in Gold ETFs. Also, the minimum investment amount one would require to do in Gold Mutual Funds is of INR 1,000 (as monthly SIP). Since this investment is made through a Mutual Fund, investors can opt for systematic investments or withdrawals too. As Gold Mutual Funds units can be bought or sold from the fund house, investors do not face liquidity risks.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2023 (%) IDBI Gold Fund Growth ₹20.1838
↑ 0.02 ₹71 7 5.6 18.7 16 13.3 14.8 Axis Gold Fund Growth ₹22.6272
↓ -0.03 ₹699 6.9 5.5 19.1 15.9 13.6 14.7 SBI Gold Fund Growth ₹22.6374
↑ 0.06 ₹2,522 6.7 4.8 18.6 15.7 13.4 14.1 ICICI Prudential Regular Gold Savings Fund Growth ₹23.9632
↓ -0.01 ₹1,325 6.6 6 19.3 15.7 13.4 13.5 Nippon India Gold Savings Fund Growth ₹29.6441
↑ 0.02 ₹2,237 6.9 5.5 18.7 15.7 13.3 14.3 HDFC Gold Fund Growth ₹23.1643
↑ 0.04 ₹2,795 5.9 5.3 20.6 15.7 13.5 14.1 Invesco India Gold Fund Growth ₹21.9774
↑ 0.04 ₹98 6.9 5.3 19.7 15.6 13.2 14.5 Aditya Birla Sun Life Gold Fund Growth ₹22.4942
↑ 0.06 ₹440 7.1 5.7 18.6 15.5 13.2 14.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 5 Dec 24 Gold Funds
having AUM/Net Assets > 25 Crore
ordered based on 3 year CAGR returns.