Gold Loan

Gold loan is a type of secured loan in which the borrower has to keep their gold ranging from 18K to 24K as a security and avail a loan against it from a financial institution or bank. In terms of comparison, a gold loan can also be considered as a type of mortgage loan, where the borrower has to keep their property or house as a mortgage with the lender.

Gold Loan Features

  • Interest Rates: Highly depends on the purity of gold, ranging from 7% to 18% per annum in public sectors and up to 24% per annum in private sectors. 
  • High Loan to Value (LTV) ratio and low Haircut: As per the guidelines of RBI, lenders are free to offer up to 90% of the value of gold as loan and implying a minimum haircut of 10%. 
  • Tenure Period: Gold loan is usually a short-to-medium term loan with a tenure period ranging from 3 months to 48 months. 
  • Low Credit Scorers can also opt for a gold loan
  • Only the value of gold is considered at the time of gold loan and not the value of other precious stones. 
  • No need of security or collateral as the gold that has been pledged with the lender will act as a security against the amount.

Compare Gold Loan

You can opt for a gold loan from several lenders including financial institutions and banks. Below is a comparison of gold loan interest rate, tenure, and loan amount from leading gold loan lenders in India.

LendersLoan AmountTenureInterest Rate
Mannapuram Gold LoanUp to Rs.1.5 crore3 months onwards12% to 29% p.a.
Muthoot Gold Loan Rs.1500 with no maximum limit7 days to 36 months12% p.a. to 27% p.a.
SBI Gold LoanRs.20000 to Rs.50 lakhUp to 36 months7.30% p.a. – 7.50% p.a.
HDFC Gold LoanRs.25000 onwards (Rs.10000 for rural areas)3 months to 24 months11% p.a. to 16% p.a.
Axis Gold LoanRs.25001 to Rs.25 lakh6 months to 36 months13.50% p.a. onwards
Canara Gold LoanRs.5000 to Rs.35 lakh12 months – 24 months7.35% p.a.
BOB Gold LoanUp to Rs.25 lakh12 months to 36 months9.00% p.a. – 9.15% p.a.
Karnataka Bank Gold LoanUp to Rs.25 lakh per account6 months to 12 months8.49% p.a. – 8.79% p.a.
(8.19% p.a. for Agriculture based gold loan)
Kotak Gold LoanRs.20000 – Rs.1.5 croreUp to 4 years10% p.a. to 17% p.a.
Federal Gold LoanRs.1000 – Rs.1.5 croreAs per the lenders’ terms and conditions.8.50% p.a. onwards

Calculate Gold Loan EMI

The online calculator provided below will help you to calculate Gold Loan EMI with the help of 3 variables including interest rate, loan amount, and loan tenure. If you have already thought of tenure, loan amount, and interest rate of your gold loan, this online calculator will be helpful to you in calculating gold loan EMIs.

Format: 12m, 36m, 3y, 7y

Monthly Payment (EMI):

Total EMIs:

Total Payments:

Total Interest:

Gold Loan Eligibility

The gold loan eligibility criteria required for availing loan against your gold jewellery or ornaments is discussed below. Though, it is highly recommended to check the gold loan eligibility criteria provided by the specific lender before going for it.

Eligibility CriteriaRequirements
Age of Applicant18 years or above
Eligible total carats of gold that can be pledged18 Carats or above
Security Gold articles. ornaments, jewellery, coins 
ProfessionSalaried, Self-employed, Farmer, Trader, or Businessman
Other criteriaThe applicant should be creditworthy

Gold Loan Documents

A number of documents are required to apply for a gold loan. Being a borrower, you have to provide the below mentioned documents to the lender.

  • Identity Proof: Voter ID proof/ Aadhar Card/ Passport/ Driving License/ PAN Card
  • Address Proof: Voter ID proof/ Aadhar Card/ Passport/ Driving License 
  • Duly-filled Application Form
  • Signature Proof: Voter ID proof/ Aadhar Card/ Passport/ Driving License/ PAN Card 
  • Age Proof: Passport/ PAN Card/ Birth Certificate
  • PAN Card or Form 60
  • Passport-sized photograph
  • Post-loan disbursement documents, if any.

Interest Rates and Fees for Gold Loan

Gold loan interest rate usually ranges from 7% to 24% among private and public gold loan lenders. It can also vary depending on RBI policies and guidelines, type of lender, current market rates, & internal policies.

Though, the gold loan interest rate highly depends on the purity of gold that you pledge. For finding out the lowest gold loan interest rate, you need to browse through various lenders available in India.

There are also a number of charges and fees associated with the gold loan apply online. The list of fees and charges are listed below:

  • Processing fee (up to 2%)
  • Documentation fee (as charged by the lender)
  • Appraiser fee (as charged by the lender)
  • Payment default fee (as charged by the lender)
  • Loan overdue fee (as charged by the lender)

There are also a number of penalties and internal charges for foreclosure, valuation, etc. levied by your lender. Therefore, it is important to go through all terms and conditions before opting for one.