Loans may get cheaper as RBI slashes repo rate by 0.25%

Gold Loan Interest Rate
Interest Rate

Starting @ 8.60%

Check Best Offers
Processing Fee

Upto 1.5%

Loan Tenure

5-30 years

Lowest EMI Per Lakh

2,162 for 5 years

Prepayment Charges


check your eligibility


What is a Gold Loan?

Gold Loan is a secured Personal Loan offered by banks and other financial institutions against the security of gold ornaments and gold coins. The gold is kept as security or collateral and the amount is lent as per the market value of the gold. The threshold limit is as per the guidelines of the Reserve Bank of India (RBI). Gold Loans can be one of the best recourses to a financial crisis since the loan is granted almost instantly with minimal documentation.

Gold Loan Interest Rates

Comparative details of Gold Loan interest rates (as on 28.05.2019) at different banks are given below:

Name of the Bank Gold Loan Interest Rate (p.a.)

Punjab National Bank

10.05% to 11.05%

Bank of Baroda


Syndicate Bank



10% to 16.70%

Axis Bank

15% to 17.5%


11.50% to 15%

Kotak Mahindra Bank

10.5% to 17%

State Bank of India


Central Bank of India


Andhra Bank


Allahabad Bank


Union Bank of India

7% to 11%

Features and Benefits of Gold Loan

The features and benefits of the Gold Loan are:

  • Eligibility: The loan can be availed by anyone who is above 18 years and up to 75 years of age and who has gold to pledge.
  • Purpose of the loan: There is no restriction on the end-use of the loan. It can be used for just about anything like Personal Loan.
  • Quantum of the loan: Quantum of the loan is based on the weight of the gold pledged. You can get as low as 1,000 and as high as 1 Crore as a loan amount. However, the amount of loan depends on the market value of the gold, your repayment capacity and the policies of the lender.
  • Lower interest rate: The rate of interest is relatively less when compared to other unsecured loans. If you opt to avail a loan lesser than your actual eligibility, then some banks may offer the loan at a rate lesser than the regular rate.
  • Quick disbursal: The loan can be availed almost instantly (sometimes in just a few minutes time) since there is very minimal documentation involved. The process involved is an appraisal of the purity and value of the gold by the appraiser and then fixing the loan quantum after deducting the margin amount. Since the bank has the option to sell the gold to adjust the loan liability in case of default by the borrower, there is no elaborate processing required to give approval for the loan.
  • Various options to repay the loan: There are various repayment options like paying back the loan in equated monthly instalments (EMI) or payment of interest only and principal in a lump sum at the end of the tenure as in the case of the bullet payment. You can repay the borrowed amount by way of cash, cheques, or fund transfer.
  • Processing charges: The processing fees typically vary between 0.50% to 2% of the sanctioned loan amount plus GST.
  • Pre-closure charges: The foreclosure charges for closing the Gold Loan before the maturity period may typically vary between 1% to 3% of the outstanding principal amount plus GST.
  • No income proof required: No income proof is required to avail the Gold Loan. Also, no proof in the form of invoice or purchase bill for having purchased the gold is required.
  • Credit score: Credit score is not a concern to avail the Gold Loan. Even applicants with a low credit score are eligible for the Gold Loan.
  • Safety of the security: The safety of the gold pledged with the bank is ensured. They are securely stored in a safety vault and you can be rest assured that your gold is in safe hands. You can retrieve the gold on clearing the payment of the loan in full.

Types of Gold Loan Schemes

The following are the different types of Gold Loan schemes:

  • Non-agricultural Gold Loan: Gold Loan availed by any category of the borrower other than farmers and agriculturists is Non-agricultural Gold Loan. This can be availed by salaried individuals, self-employed individuals/professionals, businessmen, students, retired persons, and so on. The only criterion is that they should have gold to pledge.
  • Agricultural Gold Loan: This loan scheme is meant for farmers to avail the loan against gold for the purpose of expenses involved in producing a crop or for investment in agriculture and allied agricultural activities.

    To avail this loan, farmers have to produce land records as proof of undertaking agricultural activities.

    These loans are categorised as priority sector loans and are eligible for interest subvention from the government. The interest rates on loans availed under this scheme are considerably lower than the regular Gold Loan rates.

    These loans are generally given for a period of 3 years. The loan can be availed as an overdraft facility in some banks.

  • Bullet Repayment Loan: The loan under this scheme is a very popular scheme since it gives the benefit of paying the principal in a lump sum at the end of the tenure of the loan. Interest will be calculated on a monthly basis and the interest applied to the loan every month has to be paid. However, the margin stipulated for this scheme is at 35% whereas for other schemes the margin stipulated is 25%.
  • Overdraft Scheme: This scheme is beneficial for persons who prefer revolving credit. Under this scheme withdrawal and repayment can be done simultaneously during the tenure of the loan. Interest is applied only on the amount utilised and not on the limit sanctioned. If the amount withdrawn is repaid, the same will be available for utilisation again. This scheme is popular among the self-employed and the businessmen who need funds for day to day operations. It can also be renewed every year by mere paying of processing fees and executing fresh documents. The margin stipulated for this scheme is 25%.
  • EMI Scheme: Under this scheme, the principal and interest can be paid in easy instalments. The maximum tenure under this scheme is 36 months for most of the banks. This scheme is best suited for individuals looking for secured loans of a higher amount and long tenure. The margin stipulated for this scheme is 25%.

Gold Loan Eligibility

Following are the eligibility criteria for Gold Loan:

  • Applicant should be above 18 years and below 75 years of age
  • The applicant should have a regular source of income
  • Income proof is not required
  • The applicant should have gold to offer as security for the loan

Gold Loans from Top Banks

Following are some of the Top Banks that offer Gold Loan:

Axis Bank Gold Loan

Axis Bank Gold Loan is popular for its instant disbursal and competitive fees and charges. You can get cash for your urgent financial needs by pledging the gold as collateral. 

Key Features of Axis Bank Gold Loan are:

  • Purpose of the loan: The loan can be utilised for any purpose. There is no restriction on the end use.
  • Quantum of loan: The minimum quantum of loan is 25,000 and the maximum quantum is 20 Lakhs.
  • Interest: The rate of interest charged is between 15% to 17.5%
  • Security: Gold ornaments and gold coins
  • Repayment: Repayment tenure offered is 6 months to 36 months

ICICI Bank Gold Loan

Bring your gold ornaments to the ICICI Bank and avail instant loan to fund your immediate financial needs. You can repay the borrowed amount easily through cheque, cash, demand draft or fund transfer. You can also foreclose part prepay the loan if required.

Key Features of ICICI Bank Gold Loan are:

  • Purpose of the loan: There is no restriction on the end use and it can be used for any purpose. Can be used either for personal requirements or business requirements.
  • Quantum of loan: You can avail a minimum amount of 10,000 and a maximum amount of 15 Lakhs.
  • Interest: The interest rates are between 10% to 16.70%
  • Processing fee: 1% of loan amount + GST
  • Security: The loan is granted against the security of gold Jewellery worth 10,000 to 15 Lakhs.
  • Repayment: The repayment tenure offered is 6 months to 12 months

HDFC Bank Gold Loan

HDFC Bank provides sanction and disbursal for Gold Loan in just 45 minutes (if everything is in place). The bank requires just a one page documentation to approve the loan. The bank offers special interest rates for women borrowers.

Key Features of HDFC Bank Gold Loan are:

  • Purpose of the loan: The loan can be used for any personal or business requirements
  • Quantum of loan: The quantum of the loan starts with a minimum of 25,000. The minimum quantum stipulated in rural areas is 10,000.
  • Interest: Interest is charged between 11.50% to 15%
  • Processing fee:5% + GST
  • Security: A loan is sanctioned against the gold ornaments or gold coins sold by the banks
  • Repayment: The minimum repayment period is 6 months and maximum repayment tenure offered is 48 months.

Kotak Mahindra Bank Gold Loan

Kotak Mahindra Bank offers instant loan against gold ornaments/coins (above 18 carat) while keeping your gold safe. The loan requires minimal documentation and customers get higher loan-to-value (LTV) ratio against their gold. The overdraft facility is also available. Any individual who is minimum 18 years old and owns gold can apply for the loan.

Key Features of Kotak Mahindra Bank Gold Loan are:

  • Purpose of the loan: There is no restriction on the end use of the loan and it can be used for meeting medical expenses, education expenses, business expenses, and so on.
  • Quantum of the loan: You can avail a loan amount of minimum 25,000 to up to 25 Lakhs.
  • Interest: The interest charged is between 10.5% to 17%
  • Processing fee: Up to 2% of the sanctioned loan amount + GST
  • Security: Loan is given against pledge of gold coins and ornaments above 18 carat
  • Repayment: The loan can be availed either by way of Term Loan or Overdraft facility.

For Term Loan, there are two payment options i.e., bullet payment and EMI. Under bullet payment, the period is stipulated at 3, 6, 9 and 12 months. Under EMI the period stipulated is 24 months and 36 months. Overdraft facility will be for 12 months and it can be renewed after one year.

Bank of Baroda Gold Loan

Bank of Baroda Gold Loan is a Demand Loan offered against gold ornaments jewellery/coins. The loan can be used for any purpose.

Key Features of Bank of Baroda Gold Loan are:

  • Purpose of the loan: The loan can be utilised for any purpose. There is no restriction on the end use.
  • Quantum of loan: The minimum quantum of the loan is 25,000 and the maximum quantum of the loan is 10 Lakhs.
  • Security: The Gold Loan is offered against the pledge of gold ornaments and gold coins
  • Interest: The interest charged is between 11.70%
  • Processing fee:50% of the sanctioned loan amount + GST
  • Repayment: The maximum repayment period is 12 months

Documents Required for a Gold Loan

Following are the documents required for the Gold Loan:

  • Application form for Gold Loan
  • Address proof (any one): Aadhaar Card, Voter's ID Card, Passport, Utility Bills, and so on (as accepted by the lender).
  • Photo ID proof (any one): Driving Licence, Voter's ID, Pan Card, and so on (as accepted by the lender)
  • Two recent passport-sized photographs of the applicant

Why Apply for Gold Loan on MyMoneyMantra?

You can do a comparative study of the rates offered by different banks online on MyMoneyMantra since all the details are collated on a single page and it is easily available for you to view. If you were to collect the information all by yourself it would be a very cumbersome and tiring process.

You can make an in-depth study of the offers by different financial institutions and when you have decided from which institution you are going to avail the loan you can apply for the loan through MyMoneyMantra.

How to Apply for Gold Loan through MyMoneyMantra?

MyMoneyMantra is a one-stop solution for all financial requirements. You can apply for the Gold Loan through MyMoneyMantra to make the whole process seamless and easy. MyMoneyMantra will take care of all the process that is required after filling the application online. For this you have to make use of the digital platform of MyMoneyMantra and apply for the loan by following some simple steps:

  • To begin with, visit the MyMoneyMantra website and select Gold Loan under the Loans menu
  • Fill in all the relevant information required for applying for Gold Loan. Provide your basic details like full name, loan amount, location, email address, and so on.
  • Select the bank from where you intend to avail the loan
  • Once the filling of the application is complete and the process initiated the representative of MyMoneyMantra will contact you and guide you through the entire process till the approval.

How to Calculate Gold Loan EMI?

The formula to calculate Gold Loan EMI is EMI = {P x R x (1+R)^N}/{(1+R)^N-1}

In this formula:

EMI is Equated Monthly Instalment

P = is principal or the sanctioned loan amount

R = is the Rate of Interest. Interest should be the monthly rate

N = is the tenure

You can use MyMoneyMantra's EMI Calculator to calculate your EMI for the proposed loan. All you need to do is enter loan tenure, interest rate, and loan amount, and click on the Calculate button for an instant result.

Gold Loan Processing Fees and Charges

The following are the Gold Loan processing fees and other associated charges:

Name of the Bank Processing fee Valuation charges Fore-closure charges Penal interest

Axis Bank

1% of the loan amount



2% on the overdue amount

Kotak Mahindra Bank

2% of the loan amount

Minimum 250 and Maximum 2,000


3% of the overdue amount


1% of the loan amount

Contact bank for the charges

1% of the principal balance if closed before 11 months for the 12 months tenure slab.

1% of the principal balance if closed before 5 months for the 6 months tenure slab

6% of the overdue amount

Syndicate Bank

1% of the loan amount

Minimum 30 and maximum 300


2% of the overdue amount


1.5% of the loan amount

250 for loan up to 1.50 Lakhs and 500 for loan above 1.50 Lakhs

2% of the outstanding loan amount if closed before 3 months and 1% of the outstanding loan amount if closed within 6 months

2% over and above the regular interest on the overdue amount

Frequently Asked Questions

What happens if the gold rate falls during the tenure of the Gold Loan?

If the gold rate falls during the tenure of the Gold Loan the Loan to Value (LTV) will be impacted and there will be erosion in the margin. If there is a deep decline in the price the banks may request the borrower to give additional collateral. Otherwise, the borrower will be requested to make a nominal payment to the loan account to bring the LTV back to the required extent.

Is a guarantor required for Gold Loan?

No, a guarantor is not required for Gold Loan.

Can a non-customer avail Gold Loan?

Yes, a non-customer will be given a Gold Loan. However, it may be required to open a Savings Bank Account at the time of availing the loan.

How will the security be treated on default in the loan account?

On default in the loan account, the gold will be auctioned and the proceeds will be adjusted towards the balance loan amount. If the proceeds are over and above the outstanding balance in the loan, the same will be credited to the savings bank account of the borrower.

How is the safety of the security pledged ensured by the financial institutions?

The gold pledged will be kept safely in a vault inside a strong room to ensure safety.

How can I repay the borrowed Gold Loan amount?

The loan can be repaid through Cash, Cheque, Demand Draft, or Online Fund Transfer.

Can I avail this loan against gold coins as well?

Yes, many banks provide loan against gold coins as well.

Latest News Snippets

17.05.2019: Increase in Gold Price by 70

According to the All India Sarafa Association the gold price rose by 70 to 33,330 owing to the increased purchase of gold by local jewellers and retailers on account of the wedding season.

15-05-2019: Gold prices up by 377

In Delhi gold of 99.9% and 99.5% purity increased 377 each to 33,395 and 33,335 per 10 grams respectively.

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