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Gold Loan: Check out banks & NBFCs offering lowest interest rates on Rs 5 lakh loan

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If you are looking for a gold loan, take a look at the current interest rate offers by some of the leading banks and NBFCs in the country.

Gold loan is a viable borrowing option during a cash crunch as it can be availed easily by pledging your household gold as a collateral. Additionally, gold loans require less documentation and provide swift disbursal, making it convenient for you to address an emergency financial crisis. Gold loans have also become popular due to increase in platforms other than banks offering loan against the yellow metal. Most financial institutions are forthcoming in providing gold loans as the collateral makes it less risky.

If you are contemplating taking a gold loan, ensure you mortgage your asset with a reputed company or bank. Ultimately, the loan is advanced against your gold, and the security of your asset is paramount.

A gold loan is offered up to 75% of the pledged gold’s market value, and if the gold prices fall, then the amount of loan you will be eligible for will also come down. So, before going for a gold loan, do check the gold prices. If the gold prices fall, the lender may ask you to pledge more gold. If you have taken a gold loan, you will be required to provide additional collateral or make a part-prepayment to adjust for the shortfall, according to BankBazaar.

Both public sector banks and private banks along with non-banking finance companies (NBFCs) offer gold loans. Like any other loan, you should decide on the loan amount as per your requirements and your repayment capacity. A gold loan can be useful if you are facing a financial emergency.

However, avoid taking a loan to fund your wants or paying for your regular expenses. At the end of the day, no matter how easily you get it, it is still a loan that you need to repay on time and in full. Do keep in mind that you may lose your precious metal if you fail to repay the gold loan as lenders will sell your pledged asset to recover their dues.

When planning to take a gold loan, do compare the loan offerings based on interest rates, processing fees, pre-closure charges (if applicable), and repayment mode before finalizing your decision.

If you are looking for a gold loan, take a look at the current interest rate offers by some of the leading banks and NBFCs in the country. The table also provides the indicative EMIs for gold loans from different lenders for a loan of Rs 5 lakh taken for a period of 2 years.

Do note that 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 tenor, or any other terms and conditions of your chosen lender.

Interest Rates and Indicative EMIs for Gold Loans of Rs 5 lakh for a Period of 2 years

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 November 30, 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. 5 lakh gold loan with a tenure of 2 years (processing fee and other charges are assumed to be zero for EMI calculation). *APR for Qtr JUL to SEP 21; ^For covid warrior; **without rebate
Data compiled by BankBazaar.com, an online marketplace for loans, credit cards and more.

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