Gold Loan Rates: The gold loan business in India is very busy. By pledging gold, people take gold loan for their business or to fulfill any need. But interest rates play the most important role in gold loan. One should always consider which bank offers the lowest rate of loan. The interest rates for gold loan are relatively low as the lender does not have to worry as you have put up gold as security.
Today many banks offer gold loans at attractive rates. Banks check the weight of gold and give loan on the basis of its purity.
no credit score required
Gold loans are also popular because many lenders who offer gold loans do not insist on credit score. Getting a gold loan will not be difficult even if your credit score is not very good. You must have gold in physical form like coins or jewellery.
interest rate on gold loan
The interest you will have to pay on the gold loan depends on the bank. For example:
HDFC Bank offers gold loan at an interest rate of 8 percent to 16.50 percent with a processing fee of 1 percent. Kotak Mahindra Bank’s rate ranges from 8 percent to 17 percent. There will be 2% GST on this. South India Bank charges interest rate from 8.25 percent to 19 percent. The interest rate of Central Bank of India is 8.45% to 8.55% and a processing fee of 0.50% of the loan amount is charged. UCO Bank’s interest rate is 8.50 percent. A processing fee of Rs 250 to Rs 5000 is charged on this. While taking a gold loan, keep in mind that you may have to pay other charges as well. It is important to know loan processing charges, valuation charges, foreclosure charges, late installment charges, etc.
Documents Required for Gold Loan
You must have any one of Passport, Driving License, Voter ID Card, Aadhaar Card, PAN Card or Form 16 for gold loan.
Banks generally accept 18 to 22 carat gold jewelery as security. If you have bought 24 carat coins from the bank then you will get gold loan against it. Non-financed items like hair pins, cufflinks, gold watches, gold bracelets, gold idols, gold utensils, thread mangalsutra, white gold, diamond jewellery, imitation jewelery etc. will not be accepted.
The price of gold will be decided on the basis of its purity. Loan is not given against 24K gold bars or biscuits. Apart from this, there is also a limit for giving gold loan. SBI provides a minimum loan of Rs 20 thousand and a maximum of Rs 50 lakh per person. Kotak Mahindra Bank gives a minimum loan of 20 thousand and a maximum of 1.50 crores.
Gold Loan Prepayment Tenure
SBI has different tenures for gold loan prepayment. For example, if the gold loan is EMI based, it has to be repaid in a maximum of 36 installments. The tenure of Liquid Gold Loan (Overdraft) is 36 months. Bullet Repayment Gold Loan in 3 Months to be repaid in 3 months. Similarly, 6 months bullet repayment loan has to be repaid in 6 months and 12 months bullet repayment gold loan has to be repaid in one year.
