Gold loans are secured loans offered by various financial institutions where the loan amount is granted against different gold articles such as jewelry and ornaments by keeping these as collateral for the loan amount. Various banks and Non- Banking Financial Institutions offer such loans to individuals to help them meet their needs. These banks include the largest public sector banks such as State Bank of India, Punjab National Bank, Bank of Baroda and private sector banks such as HDFC Bank, ICICI Bank, Axis Bank also offer loans against gold.
Documents required for taking a Gold loan:
- Passport, driver’s license, voter’s ID, and PAN card are all acceptable forms of identification (any one)
- Proof of Address or Aadhaar card.
- Leave and License Agreement / Utility Bill (during the last three months) / Passport (any one).
- Financial statements over the previous three months (where salary/income is deposited).
- Pay receipts for the previous three months.
- Two photographs (passport size)
What are the Features and Perks of a Gold Loan?
The following are some of the most important advantages and benefits of a gold loan.
- Gold loans are quick and simple to obtain. A loan secured by gold is disbursed in a relatively quick timeframe. Such loans are often disbursed in just an hour by lending institutions.
- Compared to the other two loans, this category of loan does not require you to possess a positive credit history.
- Gold loans are backed by collateral. As a result, bank rates of interest on gold loans are lower than those on personal loans, which are unsecured loans
- Gold loans have minimal service charges, and in certain situations, none at all.
- Some banks wouldn’t incur fees if you pay off your loan right on time.
- For such a loan, one that is pledged against gold, banks and Non – banking financial institutions rarely demand evidence of income.
- To get this loan, you must put up gold jewelry, decorative items, bars, coins, and other gold items as securities.
Top 5 Banks and NBFCs that provide Gold Loan in India:
Let’s have a look on the best banks offering gold loans in India along with key highlights of their offerings:
1.ICICI Gold Loan:
Key highlights of Gold loan offered by ICICI bank are:
| Particulars | Details |
| Loan amount | Up to Rs 1 Crore |
| Interest Rate | 10.50% p.a. onwards |
| Maximum Tenure | 1 year |
| Processing Fee | 1% of the loan amount + GST |
| Prepayment Fees | 1% of the Outstanding Principal |
Documents Required:
● 2 Copies of passport size photos.
● One Identity Proof
2. Axis Bank Gold Loan:
Axis Bank Gold Loan Incorporates
Large Loan Ranges – The Axis Bank Gold Loan comes with a large loan amount, allowing you to meet any necessity. This loan has as much as 20, 00,000. available to it.
Loan For Gold Ornaments – The goal of a gold loan is to make it simple for you to get a loan using the gold you purchased. This loan can be used to pay for gold jewelry that you already own.
Immediate Fund Disbursement – With Axis Bank, you can get your loan allocated as soon as the next business day. Although loan disbursement is contingent to bank authorization, the money will be granted the next day if authorized.
Axis Bank Gold Loan Key highlights:
| Interest Rate | 12.50% p.a.to 17.50% p.a |
| Loan Amount | Rs.25,001 to Rs.25 lakh |
| Loan Tenure | Up to 3 years |
| Processing Fee amount + GST | 1% of the loan |
3. HDFC Bank Gold Loan:
HDFC Bank offers a Gold Loan including an interest rate as low as 9.50 percent per annum and a principal balance as little as Rs.25,000. The payback period is up to two years, with a service charge of 1.5 percent of the principal amount levied.
SampoornaBharosa Gold Loan, an unique gold loan program offered by HDFC Bank, is aimed to extend monetary assistance to people in substitution of personal gold. It’s a simple loan that may be utilized to cover a variety of financial needs, and it’s offered at all HDFC outlets nationwide.
HDFC Bank Gold Loan Key highlights:
| Scheme | Loan Amount | Interest Rate |
| Honhaar | Need Based Upto Rs 10 Lakh | Repo Linked Lending Rate (RLLR + 2%) |
| Prabashi Siksha Loan | Need Based | RLLR + 2.15% |
| Kaushal | Up to 1.5 lakh | RLLR+1.50% |
| Udan | Up to Rs.7.50 lakhs above Rs.7.50 lakhs Irrespective of Amount(With 100% tangible collateral security) | RLLR + 2.00% RLLR + 2.75%RLLR + 2.00% |
| SARASWATI | Up to Rs.7.50 lakhs above Rs.7.50 lakhs Irrespective of Amount(With 100% tangible collateral security) | RLLR + 2.00% RLLR+2.75% RLLR+2.00% |
4. Muthoot Finance Gold Loan:
Muthoot Finance Ltd. is among Country’s most renowned gold loan companies, including over 2 lakh clients using its facilities every day. Through Muthoot Finance Ltd.’s gold loan programs, you can get cash for your gold in a short span of time.
The advantages of a Muthoot gold loan are as follows:
Over 12 gold loan schemes to choose from.
Loan funds are disbursed quickly.
Service team is quite attentive.
You can get a loan for as little as Rs.1,500.
The maximum borrowing quantity is unrestricted.
There are no fees if you pay off your loan early.
Gold is assessed by a team of in-house experts.
Guaranteed security of the gold jewelry that will be used to repay the loan.
Muthoot Finance Gold Loan Key highlights:
| Rate of Interest | 12% p.a. to 27% p.a. |
| Loan Amount | Rs.1,500 with no maximum limit |
| Loan Tenure | 7 days to 36 months |
5. SBI Gold Loan:
The SBI Gold Loan has a number of appealing characteristics, some of which are listed below.
Adjustable loan value – Loans ranging from Rs.20,000 to Rs.50 lakh are available.
Flexible repayment duration – The loan can be paid back in EMIs over a duration of up to 36 months.
Flexible monthly payment options – Customers can pay off their SBI Personal Gold Loans via gold loans, liquid gold loans, or bullet repayment gold loans.
Collateral – Gold goods used as collateral are retrieved when the loan is repaid.
SBI Gold Loan Key highlights:
| Interest Rate | 7.50% |
| Loan Amount | Rs. 20,000 – Rs. 50 lakhs |
| Loan Tenure | 3 Years |
| Processing Fee + GST | 0.50% of the loan amount + GST subject to a minimum of Rs.500 |
FAQs
1. How is the interest on a gold loan determined?
Interest on gold can be calculated by deducting the principal value from the entire cost owed. Using an online gold loan EMI calculator, you can simply calculate the cost you have to repay by the completion of the term.
2. Who qualifies for a gold loan?
A gold loan option is provided to workers, individuals, merchants, farm owners, and self-employed and business people. They must be between the ages of 21 and 70.
3. Is it necessary to have a CIBIL score in order to get a gold loan?
To get a loan against gold, you don’t need a CIBIL score. With a good credit score, you could however get attractive interest rates and payback conditions.
