Lowest Gold Loan Interest Rate

Finding out the lowest gold loan interest rate is crucial before applying for a gold loan as it can save you significant money and will also help in reducing the Equated Monthly Instalment (EMI) amount. Currently, IDBI Bank, HDFC Bank, and UCO Bank offer low interest gold loan in India. 


Compare Interest Rates of All Top Banks in India

Below is the table of comparison of gold loan interest rates of all top lenders in India. The information will help you identify the lowest gold loan interest rate in which bank.

BankRate of Interest (p.a.)Loan AmountProcessing FeeTenure
Karnataka Bank Gold Loan9.23% p.a. onwardsUp to Rs. 25 Lakhs0.25% (minimum Rs. 250) + applicable tax6 months - 1 year 
IDBI Bank Gold Loan5.88% p.a. onwardsRs. 10,000 - Rs. 20 Lakhs1%3 months - 1 year
UCO Bank Gold Loan7.40% - 7.90% p.a.No upper limitUp to 0.20% Decided by the bank
PNB Gold Loan

8.65% p.a.

Rs. 25 000 to Rs. 25 Lakhs0.30% or Rs. 500 + GST, whichever is higherUp to 1 year
Bank of Baroda Gold Loan9.20% - 9.30%Up to Rs. 25 LakhsUp to 0.50% + GST1 year - 3 years
Canara Bank Gold Loan13% onwardsRs. 5,000 - Rs. 35 Lakhs1% 6 months - 1 year
HDFC Bank Gold Loan7.60% - 16.81%Rs. 25,000 onwards (Rs. 10,000 onwards in rural markets)1%3 months - 2 years
SBI Gold Loan8%Rs. 20,000 - Rs. 50 LakhsNil till 31.01.2023Up to 3 years
Indian Bank Gold Loan8.25% onwardsNo upper limit0.50%Up to 35 months
ICICI Bank Gold Loan10% - 17.95%Rs. 50,000 - Rs. 1 Crore1%6 months - 1 year
Kotak Mahindra Bank Gold Loan8% - 17%Rs. 20,000 - Rs. 1.5 CroresUp to 2% + GSTUp to 4 years
Axis Bank Gold Loan17% - 19%Rs. 25,001 - Rs. 25 LakhsUp to 0.50%6 months - 3 years
Muthoot Finance Gold Loan12% - 26%Rs. 1,500 onwardsRs.50/loan onwards1 - 3 years

Get Gold Loan with No EMI Option from Rupeek

Rupeek Gold Loans are instant secured loans with no EMI option at interest rate starting at 8.88% p.a. You can avail of emergency loan ranging from Rs 50000 to Rs 20 Lakhs against gold jewellery, coins & ornaments. With bullet repayment option you repay entire loan at the end of the tenure.

Factors Affect the Interest Rate of Gold Loan

Following are some common factors that affect the interest rate on loan against gold:

  • Prevailing cost of gold: The gold loan per gram rate will be higher if the cost of gold in the market is on the higher side. This is because the value of the gold ornaments or coins that you will pledge will also be high. Lenders will offer the lowest gold loan interest rate in such cases as the risk associated will be low. If you are unable to pay EMIs due to any problem, the lender can easily recover the balance loan amount by selling or auctioning the pledged gold ornaments.
  • Relationship with the bank: Usually, most lenders offer gold loans to their existing customers. However, in some cases, individuals without any history with the bank can also get a gold loan. Existing customers of lending institutions usually get a low interest gold loan.
  • Inflation: If the rate of inflation is high, there will be a depreciation in the value of the currency, and hence, people tend to gather more gold. This, in turn, increases the price of gold, and in such time availing of a gold loan can be cheaper as the bank gold loan interest rates will be lower.
  • Documents accuracy: If the documents required for gold loan are not sufficient or incorrect as per the lender, the gold loan interest rate can get affected.
  • Research: It is important to narrow down on some best gold loan banks before you apply for a gold loan, as all lenders offer gold loans at different interest rates. Applying for a loan without detailed research can lead you to get a high gold loan interest rate deal. This is the best way to get the lowest gold loan interest rate.
  • Monthly income: When you apply for a gold loan, your monthly income is one of the main factors that the lender will consider, as it shows your loan repayment capacity. The more your income is, the more assured the lender will be about your repayment capability. This will automatically lower the gold loan interest rate charged by the lender. 
  • Principal loan amount: The loan amount that you need has a major impact on your gold loan interest rate. The interest rate will be higher if you are looking for a higher loan amount. Therefore, before deciding on a gold loan interest rate, make sure to assess the loan amount required by you and compare all available options. You can use the gold loan calculator to know your gold loan eligibility and get an estimated amount.
  • Credit score: Your creditworthiness is determined by your credit score. It is one of the most important factors that the lender will consider when calculating the gold loan interest rate. A good credit score means you have good repayment history and are capable of repaying the loan amount easily without fail. The higher your credit score is, the better your gold loan rate of interest will be. Before applying for a gold loan, always Check CIBIL Score.
  • External benchmark lending rates: The interest rate on your gold loan is determined by the external benchmark to which the lender links their rate of interest. The RBI has instructed that lenders link their lending interest rates to external benchmarks, which is the repo rate or the 10-year government bond rate. Therefore, this rate impacts the gold loan interest rates. 

Lowest Gold Loan Interest Rate FAQs

Which bank provides the gold loan at the lowest interest rate?


Currently, IDBI Bank, HDFC Bank, and UCO Bank offer the lowest gold loan interest rate in India, starting from 5.88% p.a., 7.60%, and 7.40% p.a.

Does credit score affect the interest rate of a gold loan?


Yes. In many cases, you may get a low interest gold loan if you have a good credit score.

Does the amount of loan affect the interest rate of a gold loan?


Yes. In most cases, the bigger the gold loan amount, the higher will be the rate of interest you have to pay on loan. 

What are the charges of gold loan other than interest rate?


Apart from the interest rate, the other fees and charges that can be applied on a gold loan are processing fees, documentation charges, late payment charges, penalties for non-payment of interest, valuation fees, etc.