Lowest Gold Loan Interest Rate

A gold loan is a secured loan that can be obtained against pledged gold ornaments or coins. It is an instant and easy way to access funds for any of your personal or business needs. Being secured in nature, gold loan interest rates in India are highly affordable. Currently, the lowest gold loan interest rate in India starts from just 8.85% p.a.. Gold loan interest rates depend on the lender’s policy, loan amount, gold purity, and repayment tenure.

  • Compare the Interest Rates Offered by Banks
  • Compare the Interest Rates Offered by NBFCs
  • Factors Affecting Interest Rates
  • Tips to Secure the Lowest Interest Rate

Compare the Lowest Gold Loan Interest Rates Offered by Banks

Below is the comparison between gold loan interest rates offered by some of the top banks in India, to help you find out the lowest gold loan interest rate in which bank:

BankInterest Rate (p.a.)Processing FeeLoan AmountTenure
SBI9% - 10.25%Up to 0.50% of the loan amount + GSTRs. 20,000 - Rs. 50 Lakhs3 - 12 months
ICICI Bank9.25% - 18%Up to 2% of the loan amount + Applicable taxesRs. 50,000 - Rs. 2 Crores6 - 12 months
HDFC Bank9.30% - 17.86%Up to 1% of the disbursal amount + applicable taxesRs. 10,000 - No maximum limit 6 - 42 months
Axis Bank17% - 19%Up to 0.50% of the loan amount + GST Rs. 25,001 - Rs. 40 Lakhs6 - 36 months
PNB8.85% onwards0.30% of the loan amount + GST or Rs. 500 + GST, whichever is higher.Rs. 25,000 - Rs. 25 LakhsUp to 36 months
Bank of Baroda9.90% - 10% Applicable charges + GSTUp to Rs. 50 Lakhs12 - 36 months
Kotak Mahindra Bank9% to 24% Up to 2% of the loan amount + GSTRs. 20,000 - Rs. 1.5 Crores12 - 48 months
IndusInd Bank10.55% - 16%Up to 1% of the loan amount + applicable taxesUp to Rs. 1 CroreUp to 36 months
Federal Bank9.74% onwardsUp to 0.50% of the loan amount Rs. 3,000 - Rs. 1.5 Crore6 - 36 months
Canara Bank9.25%Up to 0.30% of the loan amount Rs. 5000 - Rs. 35 LakhsUp to 12 months

Compare the Cheapest Interest Rates Offered by NBFCs

Below is the comparison between gold loan interest rates offered by some of the top NBFCs in India, to help you find out the lowest interest rate for a gold loan:

NBFCInterest Rate (p.a.)Processing FeeLoan AmountTenure
Muthoot Fincorp10.90% - 22% 0.25% - 1% of the loan amountRs. 1,500 - Rs. 5 Crores7 days - 36 months
Bajaj Finserv9.50% - 24%0.15% of the loan amountRs. 5,000 - Rs. 2 Crores1 day - 12 months
Manappuram Finance21.59% onwards Rs. 25 + TaxUp to Rs. 1.5 CroresUp to 12 months
Manipal Fintech (Formerly SahiBandhu)10.39% p.a. onwards0% - 2% of the loan amount + GST Up to Rs. 1.5 Crore3 months onwards
IndiaGold9.6% - 12.6% NilDepends on the loan requirement & gold’s valueUp to 6 months
Oro Gold9.90% onwardsNilUp to 75% of the pledged gold value Up to 6 months
Rupeek8.88% - 24% 0% - 1%Rs. 20,000 - As per requirement/eligibility180 days - 12 months
IIFL11.88% - 27%Rs. 0 onwardsRs. 3,000 - Rs. 2 Crores6 - 24 months
Shriram Finance10% - 30%Up to 0.5% of the loan amountUp to 75% of the pledged gold value1 - 12 months 

Factors Affecting Gold Loan Interest Rates

Below are some common factors that influence the gold loan interest rates offered by prominent banks and NBFCs in India.

  • Borrower’s income: While processing a gold loan request, lenders consider the monthly income of the applicant. Applicants with a stable income give lenders assurance of their capacity to repay the loan, leading to the cheapest gold loan interest rate.
  • Market rate of gold: According to the Reserve Bank of India (RBI), the Loan to Value (LTV) ratio for gold loans is up to 75%. This ratio signifies the maximum loan amount that banks can offer based on the market value of the pledged gold. If the gold market rate is high, the value of the pledged gold items will also be high, leading to lower interest rates. 
  • Principal loan amount: The loan amount you apply for determines the interest rate on your gold loan. You will have to pay higher interest if you want a higher loan amount. Therefore, it is important to assess your loan requirements before applying for a gold loan. 
  • External Benchmark Lending Rates (EBLR): All gold loans offered by Indian banks are linked with an external benchmark, such as the RBI repo rate, the 10-year government bond rate, etc. Gold loan interest rates fluctuate with the changes in the policy rates of the RBI or the Government of India. 
  • Credit score: Gold loan providers in India consider the creditworthiness of borrowers for loan approval. This creditworthiness is defined by the CIBIL score or credit score. A borrower with a good CIBIL score is more likely to get lower interest rates without any hassle. 
  • Inflation: The value of currency depreciates when the rate of inflation is high, hence, people tend to accumulate more gold. This pushes the gold prices higher, and in such times, if you avail a gold loan, you may get it at a lower interest rate from lenders.
  • Relationship with the lender: Most lenders extend gold loans to their existing customers. In some cases, individuals with no history with the lending bank can also avail of gold loans. However, existing customers of lenders are typically in a better position to get a lower interest rate.

Tips to Secure the Lowest Gold Loan Interest Rate

Below are some useful tips to get low interest gold loan in India:

  • Pledge gold of high purity: Borrowers pledging gold with high purity (typically 22 karats or above) generally get lower interest rates.
  • Compare offers by multiple lenders: Compare interest rates, charges, and terms offered by various banks and NBFCs to get the best deal.
  • Maintain a good credit score: Maintaining a strong credit history and excellent CIBIL score can get you the lowest interest rate on gold loans.
  • Negotiate with existing bank: If you have a long relationship with your bank, consider negotiating for a favorable interest rate.
  • Consider a shorter tenure: A shorter loan tenure often comes with lower interest rate, as lenders are exposed to lesser risk of gold price fluctuations.
  • Check special offers: Look out for promotional offers and discounts, during festivals or special occasions.
  • Apply with a co-applicant: If the lender permits, adding a co-applicant with a good credit score can lead to a better interest rate.
  • Be mindful of loan prepayment: If loan prepayment comes with a heavy penalty or foreclosure fee, avoid making prepayment. It can increase the overall cost of your loan.
  • Consider online lenders: Don’t forget to check offers from online lenders, as they often provide competitive gold loan rates.
  • Ensure accurate appraisal of your gold: A transparent and accurate appraisal of the gold can help you receive fair value.
  • Make timely repayments: Avoid defaulting on loan repayments, as it can negatively affect your credit score and often lead to higher interest rates.

FAQs

A gold loan interest rate is the amount or percentage charged by lenders (banks, non-banking financial companies or other financial institutions) against the amount of gold loan provided against the gold as collateral pledged by borrowers. In India, currently gold loan lowest interest rate is 8%. Gold loan interest rates generally range from 8.85% and 24% p.a. at present. Borrowers can repay the interest amount either in equated monthly instalments (EMIs) or as a lump sum based on the lender's policy.

Currently, PNB, SBI, and Kotak Mahindra Bank are best to get gold loan at low interest rate in 2025.

PNB and SBI banks have the lowest interest rate on gold loans as of now.

The interest rate of 1 lakh gold loan varies from lender to lender, depending on the gold’s value and borrower’s creditworthiness.

Yes, you can get a gold loan without a credit score from a few lenders as gold loans are obtained against the value of the gold pledged, making credit history less crucial factor for approval. 

You can get a gold loan amount starting from as low as Rs. 1,500.

To calculate the gold loan interest, you can use the simple formula: Interest = Principal x Rate x Time. Here to Principal is the loan amount, Rate is the annual interest rate, and Time is the loan tenure.

The Section 24 of the Income Tax Act of India makes a borrower eligible for a tax exemption on gold loan only if the amount is utilised for the purchase or construction of a residential property. The deduction amount available is limited to Rs. 2 Lakh per annum.

If you default on a gold loan, the lending institution can take steps to recover the outstanding amount. The steps may include charging penalties, issuing reminders, or potentially auctioning the pledged gold.

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

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

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.

Updated On Jun 3, 2025
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Written By Reshma RawatAssistant Content Manager of MyMoneyMantraCredit Cards, Credit Score, Personal Loan, Home Loan, etc.

Reshma Rawat is a passionate writer, with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra, and writes blogs & webpages on financial products (loans, credit cards, insurance, financial policies by government, mutual funds, etc.

Assistant Content Manager of MyMoneyMantra
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Written By Abhijeet SinghSenior Editor of MyMoneyMantraCredit Cards, Credit Score, Personal Loan, Home Loan, etc.

Abhijeet Singh has comprehensive experience in business writing, content management, SEO, social media and user analytics. Key areas of expertise include stock markets and personal finance.

Senior Editor of MyMoneyMantra