In our last article, we have discussed how to apply for a gold loan and the most important things you should keep in mind while taking a gold loan. In this article, we have compared the best banks for Gold loans in India.
When it comes to a gold loan, the most important thing apart from your eligibility is Interest cost.
Normally, NBFCs and private banks charge a higher rate of interest compared to PSU banks as they have a higher cost of funds.
The rate of interest varies between 7.5-22% in most cases.
Here are the average interest rates charged by the banks for loan against gold;
Best Gold Loan Interest Rate Comparison
| Banks | Interest rates per year |
| ICICI Bank | 11% |
| IndusInd Bank | 12.75% |
| HDFC Bank | 11.28% |
| Canara Bank | 7.65% |
| SBI – State Bank Of India | 7.5% |
| Bank of Baroda | 7.5% |
| UNION Bank | 7.5% |
| AXIS Bank | 12.5% |
| Punjab National Bank – PNB | 7.8% |
| Federal Bank | 8.5% |
| Kotak Mahindra Bank | 10% to 17% depending on purpose & profile and discretion of bank |
Maximum and Minimum Limit of Gold Loan
The amount of loan that an individual can get against a gold article may vary from banks to banks.
Almost all banks have their maximum and the minimum limit fixed for Gold Loan. Above the maximum limit, banks are not going to disburse loans to you. Similarly, below the minimum limit, you can not take a gold loan.
Here is a comparison showing the maximum and minimum limit of Gold Loan that banks are offering;
| Banks | Maximum Limit | Minimum Limit |
| State Bank Of India (SBI) | 50 Lakhs | 20,000 |
| Punjab National Bank (PNB) | 10 Lakhs | 25,000 |
| ICICI | 1 crore | 10,000 |
| IndusInd | 10 Lakhs | – |
| HDFC | – | 25,000 ( Rs. 10,000 in rural market) |
| Canara Bank | 20 Lakhs | 5,000 |
| Bank Of Baroda | 25 Lakhs | – |
| Union Bank Of India | 20 Lakhs | – |
| AXIS | 25 Lakhs | 25,001 |
| Federal Bank | 150 Lakhs | 1,000 |
| Kotak Mahindra Bank | 15 Lakhs | 20,000 |
Gold Loan Processing Fee – Comparison
After interest cost, the second most important cost is the processing fee. The processing fee basically depends on the amount of loan you take from the bank. Here is a quick comparison of processing fee banks in India charge on Gold Loan.
| Banks | Processing fee |
| SBI | 0.25% of the Loan amount + applicable GST minimum Rs250/- + applicable GST and Nil if applied through YONO. |
| PNB | 0.75% of loan amount (inclusive of appraiser fee for testing and valuation of Gold Ornaments) |
| ICICI | 1.0% of loan amount |
| IndusInd | Upto 1% of loan amount subject to a minimum of INR 750. |
| HDFC | 1% of disbursal amount |
| Canara Bank | 0.50% of the Loan amount (Minimum of Rs.500/- and Maximum of Rs. 5,000/-). |
| Bank Of Baroda | Up to Rs 3.00 Lakhs – NIL Above Rs 3.00 Lakhs up to Rs 25.00 Lakhs – Applicable charges + GST.Security Secured by min. 18 carat Gold Jewellery/Ornaments. |
| AXIS | 1% plus applicable taxes |
| Federal Bank | For Loan amount up to 5 lakhs = 600For Loan amount above 5 Lakhs=0.50% of sanctioned limit |
| Kotak Mahindra Bank | Upto 2% of Loan amount + applicable GST |
Gold Loan Tenure
In general, banks do not offer gold loans for a long period of time. In most cases, gold loans are offered for a maximum tenure of 12 to 24 months from the sanction date.
| Banks or NBFCs | Loan Tenure offered |
| HDFC Bank | from 3 months up to 24 months |
| SBI | 36 months |
| ICICI | 6 months to 12 months |
| IndusInd | 3 to 24 months |
| Canara | 12 months |
| Bank Of Baroda | 12 months |
| Union Bank Of India | 36 monthsFor non-agricultural purpose – 12 months |
Valuation Fee
Gold appraisers have to calculate the valuation of Gold based on the prevailing market rate and quality of Gold. For such valuation, the appraiser will charge a fee to the bank which in turn will be recovered from you while disbursing a gold loan.
Gold appraiser charges will be paid by the Applicant. Here is a quick comparison for better understanding;
| Banks / NBFCs | Amount in Rupees |
| HDFC | Rs 250 +applicable tax up to 1.5 lacs per packet per loanRs 575 +applicable tax above 1.5 lacs per packet per loan |
| ICICI | For loans: Up to 1 lakh: ₹100 Greater than 1 Lakh up to 2 lakh: ₹200 Greater than 2 lakh up to 3 lakh: ₹300 Greater than 3 lakh up to 4 lakh: ₹400 Greater than 4 lakh: ₹500 |
| IndusInd | for loan amount up to 2 lacs :Rs.500/-for loan amount greater than 2 Lacs :Rs.750/- |
| AXIS | 500 plus applicable taxes |
| Federal Bank | Rs. 90 to Rs 265, above Rs. 5,00,000 loan amount Rs 85 per lakh |
Prepayment charges
Prepayment is the early repayment of a loan by a borrower, in part or in full. Most of the PSU banks are not charging anything for prepayment. However private banks are charging 1% on the loan amount as prepayment charges.
| Banks / NBFCs | Amount in Rupees |
| HDFC | 1% + applicable tax |
| PNB | Nil |
| SBI | NIL |
| ICICI | 1%, If a/c is closed within 11 months NIL, If a/c is closed after 11 months |
| IndusInd | Up to 1% of the outstanding amount |
| Bank Of Baroda | NIL |
| AXIS | 2% of the sanctioned loan amount plus applicable taxes, if the loan is closed before 3 months from the sanction date. 1% of the sanctioned loan amount plus applicable taxes if the loan is closed between 3 months to 6 months from the sanction date. 0.50% of the sanctioned loan amount plus applicable taxes if the loan is closed between 6 months to 11 months from the sanction date. NIL Foreclosure charges will be applicable if the loan closed after 11 months from the sanction date. |
| Kotak Mahindra Bank | 2.25% of foreclosure amount if closed 1 month ahead of the tenure. However, charges may be waived partially or fully at the discretion of the Bank. |
Apart from processing charges, valuation fees, certain other charges like stamp duty, document charges, and auction charges are charged by the banks. Stamp duty and auction charges are charged at actuals, whereas document charges may vary between Rs 200 to 500 plus taxes. Therefore, you should check with the bank for all the charges that will be levied before availing of the Gold Loan.
What are the documents required for a Gold Loan
To Apply for Gold Loan, you may be asked to produce following documents before the banks;
- Application for Gold Loan with two copies of photographs.
- Two passport size photograph
- ID Proof such as Driving License / PAN Card / Form 60/61 / Passport Copy / Voter ID Card / Aadhaar Card / Ration Card. Anyone document needs to be submitted
- Address Proof such as Driving License / Voter ID Card / Ration Card / Aadhaar Card / Passport Copy / registered lease agreement with not older than 3 months utility bills in the name of landlord (anyone)
- Proof of landholding in case of agriculture loan of more than Rs. 1 lakh
Disclaimer: Data collected and Compiled from respective banks’ websites and publicly available information. Average advertised rates offered by the banks are considered in the table. We do not sell any loans on our own and do not charge any fee from any customers/viewers. Display of any trademarks, trade names, logos, and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply our partnership with the owner of the Intellectual Property or issuer/manufacturer of such products. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Before taking any decision, please check the terms and conditions with the bank or financial institution concerned.
