Among the various types of loans available in the market, gold loan is the most secure and easier one as compared to personal loans. This is because personal loans usually have high-interest rates ranging from 15 %, while gold loans from banks have interest rates from 9% to 13% only. You have a fixed installment to pay in the decided tenure which also helps to repay the gold loan in time if you are paying it properly. One more important factor in applying for a gold loan is “which bank is the best bank for gold loan?”. As there are many factors such as interest rate, processing fee, etc. that if considered properly will reduce the interest of your loan.
Factors to consider before choosing a bank
Minimum loan amount
Interest rates
Tenure
Processing fee
How much time does it take to process a gold loan application?
How can I know whether I’m eligible for a gold loan?
What are different ways through which I can repay my loan?
How can I know how much gold loan amount I can prevail?
Factors to consider before choosing a bank
Minimum loan amount
Depending upon the quantity of gold you have, the loan amount varies. But as per banks rule, there is a certain limit to which only banks can sanction loan amounts that will be deciding your loan amount to be availed.
Interest rates
Different types of gold schemes have different tenures, and hence, different interest rates which loan applicants have to pay. Some of the banks with lower interest rates are HDFC Bank, IndusInd Bank, ICICI Bank, Yes bank, etc.
Tenure
This is one of the factors due to which interest rate changes. If you are looking for long tenure loans that are up to four to five years, then interest rates are bound to be higher as compared to 1-year loan schemes.
Processing fee
Let’s understand this, with the help of a real example such as the SBI gold loan. Here,
Processing fee= 0.5% of loan amount + GST
=Approx. 500 Rs or more
Top banks for gold loan
So, we hope now you have understood the factors which will help you decide the best bank for a gold loan. Here’s a list of the best banks for gold loans with affordable schemes.
| Bank names | Interest Rate | Loan amount | Processing fee (without GST) | |
| 1) | ICICI Bank | 9.00%(Minimum)
19.76%(Maximum) |
10,000
to 10,000,000 |
1% of the loan amount |
| 2) | HDFC Bank | 8.50%(Minimum)
15.97%(Maximum) |
25,000
to Unlimited |
1% of the loan amount |
| 3) | IndusInd Bank | 10.00%(Minimum)
16.50%(Maximum) |
50,000
to 50 lakhs |
1% of the loan amount |
| 4) | Yes Bank | 9.65%(Minimum)
15.00%(Maximum) |
25,000
to 50 lakhs
|
0.75% of the loan amount |
| 5) | Fincare Small Finance Bank | 10.99%(Minimum)
22.99%(Maximum) |
10,000
to 40 lakhs |
0.5% of the loan amount |
| 6) | Canara Bank | 7.35% onwards
|
5,000
to 20 lakhs |
0.5% of the loan amount |
| 7) | SBI (State Bank of India) | 7.3% onwards | 20,000
to 50 lakhs |
0.5% of the loan amount |
Profile of loan application is also an important factor before sanctioning of the loan. The Gold loan will be issued only if the requirements of the scheme are fulfilled. Likewise, once you have submitted all the documents properly, the loan amount will be transferred to your account in a specific interval of time. We hope this list helps you in deciding your gold loan bank depending on your needs.
Here are a few questions, which people have in their minds before applying for a gold loan.
FAQ
1. How much time does it take to process a gold loan application?
Mostly, the loan amount is disbursed on the same day, but since the verification of your documents and gold objects take time, there might be a delay of a few hours more.
2. How can I know whether I’m eligible for a gold loan?
Anyone of age 18 years or more, owning gold items is eligible for a gold loan. There are a certain set of requirements by individual banks too.
3. What are different ways through which I can repay my loan?
You can repay your loan in the form of DD (demand draft), cheque, cash, or fund transfer. Amidst Covid, people are also paying their loans by transferring the amount online.
4. How can I know how much gold loan amount I can prevail?
It depends on the gold rate and purity of your gold, and the schemes of the bank.
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