The high availability of loan guarantees (coins and gold home ornaments), competitive interest rates that are often lower than those of a personal loan, and the possibility of fast and hassle-free disbursement make loans of Gold one of the preferred financing facilities in the country. These secured loans can not only help those who are cash-strapped during an emergency, but they can also help meet their financial goals.
Gold loans are also often the first choice of borrowers with average to low credit scores, as that leads to higher personal loan fees at best or personal loan application rejection at best. worst case.
That said, before applying for a gold loan, make sure the value of your pledged collateral is sufficient to meet your financing requirements. Lenders generally lend up to 75% of the market value of the gold pledged in gold loans. That is, if the applicable market value of your gold is Rs 1 lakh, a lender would not lend more than Rs 75,000 against you. Borrowers would also do well to compare their options online between various banks and NBFC to find the deal with the best payment terms. Ideally, they should check interest rates, LTV allowance, processing fee, prepayment charges (if applicable), and also the ease of the loan disbursement process, according to BankBazaar.
Most importantly, they should carefully assess the affordability of their gold loan EMIs, as any lax repayments could lead to additional penalties and even the potential loss of a precious asset.
So if you are looking for a gold loan, here are current offerings from some of the top banks and NBFCs in the country. We have also provided indicative EMIs for 1 lakh rupee gold loans taken over 2 years for each of the lenders mentioned in the table below.
Please note that we have only considered the lowest advertised gold loan interest rate for each of the lenders, we have not considered the processing fee or any other charges for the EMI calculation, and the rates applicable to you could be higher depending on your loan amount, LTV ratio, loan tenure or any other term and condition of your chosen lender.
Indicative EMI and Interest Rates for Rs 1 Lakhs Gold Loans with a 2-Year Tenure
Disclaimer: The data compilation has taken into account the interest rates on gold loans for all public and private publicly traded banks (EEB) and selected NBFCs. Banks for which no data is available on their website are not taken into account. Data collected from respective websites on August 17, 2021. Lenders are listed in ascending order based on interest rate, that is, bank / NBFC offering the lowest interest rate on gold loans (for various amounts loan) is placed at the top and highest at the bottom. The table has considered the lowest advertised rate offered by the lenders. The indicative EMIs have been calculated based on the interest rate mentioned in the table for a 1 lakh rupee gold loan with a term of 2 years (the processing fee and other charges are assumed to be zero for the calculation EMI). * APR for the quarter of April to June of 2021.
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards, and more.