Gold loans could be a good option even for those borrowers who have a poor credit score due to which they might not be eligible for an unsecured loan.
If you’re looking for a gold loan, you first need to check whether the value of your pledged gold would be enough to meet your loan requirement.
A securitized loan like a gold loan usually comes cheaper than unsecured loans like a personal loan. A gold loan could, hence, be a handy way to raise money to meet a financial goal or during any kind of emergencies. Competitive interest rates, fast and easy disbursal and flexible repayment tenures are some of the reasons that make gold loans one of the most popular financing facilities in our country.
Gold loans could be a good option even for those borrowers who have a poor credit score due to which they might not be eligible for an unsecured loan and even if they do, the applicable interest rate is likely to be much higher than the rates extended to those with stellar credit scores.
In August last year, the Reserve Bank of India announced to increase the permissible loan to value limit for gold loans (for non-agricultural purposes) from 75% to 90% of the pledged gold’s value in a bid to relax liquidity norms for the common people during the Covid-19 pandemic. This step, valid until March 31, 2021, is allowing borrowers to get a higher loan amount on the same amount of gold to better meet their financing requirements, according to BankBazaar.
That being said, if you’re looking for a gold loan, you first need to check whether the value of your pledged gold would be enough to meet your loan requirement. You should also compare your options to find the deal with the best repayment terms. You should check for things like interest rates, processing fee, pre-closure and part-prepayment charges, tenure flexibility, late payment charges, ease of loan application, etc. to make an informed selection.
Most importantly, ensure you have a thorough repayment plan to be able to clear your loan dues in full on time and avoid additional penalties and loss of a precious asset, as per BankBazaar.
To help you in this regard, here are the lowest interest rates on gold loans that are currently being offered by some of the leading banks and NBFCs in the country.
We’ve also provided the indicative EMIs for gold loans of Rs 5 lakh taken for a 3-year tenure for each of the lenders. Do note, the interest rate applicable to you could be different based on your loan amount, loan tenure or any other terms and conditions laid down by your lender.
Interest Rates and Indicative EMIs for Rs 5 lakh Gold Loans With 3-year Tenures
Disclaimer: Interest rates on gold loans for all listed (BSE) public and private banks and selected NBFCs have been considered for data compilation. Banks for which data is not available on their websites have not been considered. Data collected from respective websites on February 23, 2021. Lenders are listed in ascending order on the basis of the lowest advertised interest rates on gold loans. The EMIs have been calculated on the basis of the interest rates mentioned in the table for Rs 5 lakh loan with tenure of 3 years (processing fee and other charges are assumed to be zero for EMI calculation). *IRR for Qtr October to December 2020. Data compiled by BankBazaar.com.