Gold loans are considered a safer option than most other types of loans. Gold in jewelry or coins can be used as collateral to obtain a loan.
Most banks offer gold loans and are not dependent on credit scores. This makes them a viable option when needing a large sum of money.
However, it’s important to note that gold loans are not without risks. If the borrower fails to repay the loan, they risk losing their gold. Unlike personal loans, which require multiple documents and a good CIBIL score, gold loans require only one KYC document and no proof of income.
Interest rates for gold loans are not set in stone but vary among different banks, giving you the power to choose the best option for your needs.
For example, Kotak Mahindra Bank offers interest rates ranging from 8% to a maximum of 24%, with a processing fee of up to 2% of the loan amount.
HDFC Bank provides gold loans at interest rates ranging from 8.30% to 16.55% and a processing fee of 1% of the loan amount.
Other banks, such as the Central Bank of India, UCO Bank, Indian Bank, Union Bank, State Bank of India, Bank of Baroda, Punjab National Bank, ICICI Bank, and Axis Bank, offer different interest rates for gold loans, giving you the flexibility to choose the best option for you.
Latest Gold Loan Interest Rates in Various Banks
- The minimum interest rate at the Central Bank of India is 8.45 percent to 8.55 percent.
- UCO Bank has an interest rate of 8.50 percent.
- If you take a loan by mortgaging gold in an Indian bank, the interest rate is 8.65 percent to 9 percent.
- In Union Bank, it is 8.65 percent to 9.90 percent.
- The State Bank of India’s gold loan interest rate is 8.70 percent, and a 0.50 percent processing fee applies.
- 9.15 percent in Bank of Baroda,
- 9.25 percent in Punjab National Bank,
- 10 percent in ICICI Bank
- and 17 percent in Axis Bank.