Best Gold Loan Options – Gold Loan has turned out to be a very good loan option compared to personal loans and credit cards. Gold Loan is available at lower interest rates compared to credit cards and personal loans.
The approval process of gold loan is faster and you can get immediate finance with a shorter period. These types of loans are backed by gold so the lender does not consider credit score or credit profile for the approval of loan.
If you are in a need of money you should evaluate gold loan as a financing option.
Gold loan or loan against gold is a secured loan option. Here customer needs to submit gold ornaments to the gold loan company as collateral for availing a loan. The company provides loan amounts as per the market value of the gold.
Here is a list of Best Gold Loan Options in India 2024.
Best Gold Loan Options in India 2024
State Bank of India Gold Loan
State Bank of India is a trusted name when it comes to taking a gold loan. SBI Gold Loan starts from Rs.20000 and goes up to 20 Lakh. You need to pledge gold ornaments or gold coins for this loan. The interest rate of SBI for this loan is the lowest at 7.75%. SBI offers three types of gold loan (1) Gold Loan (2) Liquid Gold Loan (3) Bullet repayment Gold Loan. Difference between these loans are given below.
| Gold Loan | Liquid Gold Loan | Bullet repayment Gold Loan | |
| Margin | 25% | 25% | 35% |
| Period | 3 Years | 3 Years | 1 Year |
| Repayment | EMI | Overdraft | Bullet Payment |
- Loan Amount – Rs.20000 to 20 Lakh
- Margin – 25-35%
- Processing fees – 0.5% of loan amount + GST
- Interest rate – 7.25 – 7.75%
- Repayment charges – NIL
Pros
- Lowest Interest rate
- No repayment charges
Cons
- Margin is 35% for bullet repayment loan (65% LTV)
Also Read – Top 5 Gold ETF in India 2020 – up to 50% returns in last 5 years
Manappuram Finance Gold Loan
Manappuram Finance is a famous name when it comes to a gold loan. Manppuram is NBFC that offers loans at a 9.9% interest rate. Manappuram offers online as well as an offline option for applying for a loan. T
he minimum loan amount offered by Manappuram finance is Rs.1000 and maximum amount is 1.5 Cr. Key features of Manappuram Finance Gold Loan are given below.
- Loan Amount – Rs.1000 to 1.5 Cr
- Loan Tenure – 3 Months to 1 Year
- Processing Fee – Rs 10 charged at the time of settlement
- Late payment Charges – 3% per annum
- Interest rate – 14% to 29%
- Repayment Charges – NIL
Pros
- Different schemes for different income group
- Lower loan amount starting from Rs.1000
- Prepayment Charges NIL
Cons
- Higher Interest rate
- Lower Tenure for the loan
- Late payment charges 3%
Muthoot Finance Gold Loan
Muthoot Finance is one of the largest and best gold loan provider in India. Muthoot Finance is famous for quick loan disbursal. Muthoot Finance provides loan from Rs.1500 with no maximum limit. Muthoot Finance also provide option to apply for loan online. Minimum documentation and safe custody of gold ornaments are plus points of Mutooth Finance Gold Loan.
- Loan Amount – Rs.15000 with no maximum limit
- Loan Tenure – 3 Months to 1 Year
- Loan processing charges – Rs.50 to 1% of loan amount
- Late payment charges – 2%
- Interest rate – 12 – 27%
- Repayment Charges – NIL
Pros
- Lower Loan Amount
- Multiple Loan Options
- Prepayment charges NIL
Cons
- Loan Tenure is up to 1 Year only
- Rate of Interest is higher
ICICI Bank Gold Loan
ICICI Bank offers unique gold loan scheme where no payment of EMI required, you need to pay loan amount and interest at the end of loan tenure. Minimum loan amount offered by ICICI Bank is Rs.10000 up to maximum limit of 15 Lakh. Key features of ICICI Bank Gold Loan are given below.
- Loan Amount – Rs.10000 to 15 Lakh
- Loan Tenure – 6 Months to 1 Year
- Processing Fee – 1% of Loan Amount
- Documentation charges – Rs.199
- Foreclosure charges – 1% if account is closed within 11 months
- Interest rate – 10% – 19.76%
- Late payment charges – 6% per annum
Pros
- Lower Interest rate
- Applying a loan with miss call
- Free gifts on loan
Cons
- Fix tenure loan
- 1% foreclosure charges
Federal Bank Gold Loan
Federal Bank Gold Loan is one of the best gold loan option. You will get instant sanction with faster processing at Federal Bank. The rate of Interest at Federal Bank is lower. You can get loan from minimum Rs.1000 to 1.5 Cr at Federal Bank. Key Features of Federal Bank Gold Loan are given below.
- Loan Amount – Rs.1000 to 1.5 Cr
- Loan Tenure – 6 Months to 12 Months
- Loan Processing charge – NIL
- Foreclosure Charge – NIL
- Interest rate – 13.25%
Pros
- Multiple Gold Loan option including door step loan and Digi Loan overdraft
- Lower Interest rate
- NIL processing fees
- No Hidden Charges
Cons
- Maximum loan tenure is up to 1 Year
Things to consider while availing Gold Loan
You should consider following important points while availing gold loan.
Loan Margin Amount
Loan amount is an important thing to consider while availing loan. Your loan amount depends upon the valuation of gold. Bank and NBFC offer gold loan above 75% of gold value. However, the bank retains a margin amount while sanctioning loans. This is to overcome fluctuation in the gold price. Bank and NBFC usually specify an upper and lower limit for the loan amount.
Interest Rate
Interest rate is important while availing gold loan. The interest rate of loan should be lower. The interest rate is decided based on associated risks. LTV (loan to value), Loan tenure, loan amount, gold price fluctuation are some of the factors that is used for deciding the interest rate. LTV (loan to value) ratio is dynamic and changes with risk. You should compare the interest rate before making a selection of loans.
Processing Fees
The processing fee is the amount charged by the lender for the processing of the gold loan application. The processing charge varies from 0-2% of the loan amount. Few lenders charge flat fees for the loan. You should consider processing fees while applying for a loan.
Processing Time for Loan
The processing time for the gold loan is lower as minimum paperwork is involved. This loan is usually processed within a few hours. Due to low processing time for a disbursal gold loan is becoming an attractive finance option for many.
Prepayment or Closure Charges
Prepayment or a Closure charge is another important thing to consider for the gold loan. The prepayment charges are variable and depend upon the lender. The charges are in the range of 0-3% of the outstanding loan amount. As you can save on interest cost by repaying loan amount it becomes important to compare prepayment or closure charges.
