Gold loan is one of the most convenient and popular ways to address any urgent cash crunch, more so because most households have gold in one form or the other.
Gold loan demand has spiked in recent times, mainly due to the Covid-19 pandemic since it affected earnings and sources of income. Gold loan is one of the most convenient and popular ways to address any urgent cash crunch, more so because most households have gold in one form or the other.
Gold can be easily pledged to avail a secured loan at a lower interest rate than unsecured loans such as a personal loan. Also, a quick and hassle-free disbursal adds to its popularity.
You can avail a gold loan from any public sector bank, private bank or a non-banking housing finance company (NBFC). While public sector banks are currently offering gold loans from an interest rate of 7% onwards, NBFCs gold loan rate starts from 11%. However, low interest rates should not be the only criteria for taking a gold loan.
Your gold loan choice should depend on your requirements and your repayment capacity. If your income has dried up or is irregular, depending on a gold loan for something important may be useful. But taking a gold loan just to fund your trivia needs or paying a bill may not make sense. Having said that, you should also remember that if you fail to repay your gold loan, the lender can sell your pledged gold to recover its dues, according to BankBazaar.
You should also be well aware that a gold loan is offered up to 75% of the pledged gold’s market value. So, before you go for a gold loan, you should check if the gold you are going to pledge as security meets the financing requirements. Ideally, you should compare the gold loan offers to get the deal. Additionally, you should also factor in associated charges like the processing fee and the pre-closure charges (if applicable) before finalizing your decision.
So, if you’re thinking of taking a gold loan, take a look at the current offers by some of the leading banks and NBFCs in the country. The table also gives the indicative EMIs for Rs 3-lakh gold loans taken for 2 years for each of the lenders.
Do note, the table only considers the lowest advertised gold loan interest rate for each of the lenders. It has not considered processing fee or any other charges for EMI calculation, and the rates applicable to you could be higher depending on your loan amount, LTV ratio, loan tenure or any other terms and conditions of your chosen lender.
Interest Rates and Indicative EMIs For Rs 3 lakh Gold Loan With 2-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 website are not considered. Data collected from the respective websites on September 28, 2021. Lenders have been listed in ascending order on the basis of interest rate i.e. bank/NBFC offering the lowest interest rate on gold loans (for various loan amounts) is placed at top and highest at the bottom. The lowest advertised rate offered by the lenders has been considered in the table. Indicative EMIs have been calculated on the basis of the interest rate mentioned in the table for Rs 3 lakh gold loan with a tenure of 2 years (processing fee and other charges are assumed to be zero for EMI calculation). *Minimum APR for Quarter January to March 2021. ^For covid warrior
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.