What Is a Gold Loan?
A gold mortgage is a secured mortgage wherein people pledge their gold ornaments or cash as collateral to attain cash right away. Banks and NBFCs (Non-Banking Financial Companies) provide these loans for short-term or emergency economic necessities. The Gold Loan Interest Rate determines the overall reimbursement cost.
Current Gold Loan Interest Rate 2025 (Latest Update)
Below is the updated desk of Gold Loan Interest Rate for predominant banks and NBFCs in India (2025).
| Bank/NBFC | Interest Rate (Per Annum) | Loan Tenure | Processing Fee | Maximum Loan Amount |
|---|---|---|---|---|
| HDFC Bank | 7.50% – 16.00% | 3 months – 24 months | 1% of loan amount | Up to ₹25 lakh |
| State Bank of India (SBI) | 7.00% – 15.00% | 3 months – 36 months | 0.50% or ₹500 (whichever higher) | Up to ₹50 lakh |
| Axis Bank | 8.25% – 17.50% | 6 months – 36 months | 1% of loan amount | Up to ₹20 lakh |
| ICICI Bank | 8.00% – 16.50% | 3 months – 24 months | 1% of loan amount | Up to ₹15 lakh |
| Manappuram Finance | 6.90% – 24.00% | Up to 12 months | ₹10 to ₹500 | Based on gold value |
| Muthoot Finance | 7.00% – 24.00% | Up to 12 months | ₹10 to ₹500 | Based on gold purity |
| Federal Bank | 8.00% – 14.50% | Up to 12 months | 0.25% | ₹1,500 to ₹1 crore |
| Punjab National Bank (PNB) | 7.25% – 12.50% | Up to 24 months | 0.75% | Up to ₹25 lakh |
Note: Rates are difficult to change relying on loan amount, tenure, LTV ratio, and borrower’s profile.
Factors Affecting Gold Loan Interest Rate
1. Gold Purity and Value
The better the purity (22K or 24K), the higher the loan to price ratio (LTV), leading to a potentially lower interest charge.
2. Loan to Value Ratio (LTV)
As per RBI policies, the most LTV ratio is 75%, meaning creditors can provide a loan of up to 75% of your gold’s present day marketplace value. A decreased LTV ratio regularly results in a reduced gold mortgage hobby price.
3. Type of Lender
- Banks normally decrease interest costs (7–12%) due to stricter eligibility.
- NBFCs may price better hobby rates (12–24%) but provide brief processing and minimum documentation.
4. Loan Tenure
Shorter tenures typically attract decreased interest quotes, at the same time as longer intervals include barely higher charges due to expanded risk.
5. Market Conditions
When gold prices upward push, creditors can provide barely higher gold mortgage interest fees because the collateral value increases.
Types of Gold Loan Interest Rate
| Type | Description | Who Should Choose |
|---|---|---|
| Fixed Interest Rate | The rate remains constant throughout the loan tenure. | Borrowers who prefer predictable EMIs. |
| Floating Interest Rate | The rate changes with market conditions or RBI repo rate. | Borrowers expecting rates to fall in future. |
Tip: Choose a fixed price for short-time period wishes and floating price for long-time period flexibility.
How to Calculate Gold Loan Interest
To calculate the total hobby payable, use this easy method:
Interest = (Principal × Rate × Tenure) ÷ 100
Example:
If you borrow ₹1,00,000 at an interest rate of 8% for 365 days,
Interest = (1,00,000 × 8 × 1) ÷ 100 = ₹8,000
Total Repayment = ₹1,00,000 + ₹8,000 = ₹1,08,000
Comparison Between Gold Loan Interest Rate (Banks vs NBFCs)
| Feature | Banks | NBFCs |
|---|---|---|
| Interest Rate | 7% – 14% | 12% – 24% |
| Loan Amount | Based on income and gold value | Based primarily on gold value |
| Processing Time | 1–2 days | Within hours |
| Documentation | More strict (KYC + income proof) | Minimal |
| Customer Segment | Salaried, business owners | Anyone with gold |
| Prepayment Charges | 0% – 2% | 0% – 5% |
Banks are best for low-interest, secured loans, while NBFCs are pleasant for urgent, small-price tag loans.
Best Ways to Get the Lowest Gold Loan Interest Rate
1. Compare Multiple Lenders
Use contrast structures or go to financial institution web sites to check actual-time gold mortgage hobby charges.
2. Maintain Good Credit Score
A CIBIL rating above seven-hundred can help negotiate decrease prices with banks.
3. Choose Shorter Tenures
Shorter loans (3–6 months) generally have decreased interest fees.
4. Opt for Online Gold Loan Offers
Banks frequently offer 0.25% to 0.50% lower costs for online gold mortgage programs.
5. Negotiate Based on Relationship
If you have got present debts or profits debts with a bank, request preferential gold mortgage interest charges.
Gold Loan vs Personal Loan: Interest Rate Comparison
| Feature | Gold Loan | Personal Loan |
|---|---|---|
| Interest Rate | 7% – 24% | 10% – 25% |
| Collateral | Required (Gold) | Unsecured |
| Approval Time | Instant (within hours) | 1–3 days |
| Tenure | Up to 3 years | Up to 5 years |
| Processing Fee | 0.25% – 1% | 1% – 3% |
| Eligibility | Based on gold purity | Based on income/credit score |
Gold loans are cheaper and faster compared to personal loans, making them ideal for pressing needs.
Hidden Charges in Gold Loans
When reviewing the gold loan hobby charge, usually take a look at for these hidden expenses:
| Charge Type | Description |
|---|---|
| Processing Fee | 0.25% – 2% of the loan amount |
| Prepayment Penalty | 0% – 5% (if paid early) |
| Late Payment Charges | 2% per month (on overdue EMI) |
| Valuation Fee | Charged by NBFCs for gold appraisal |
| Auction Fee | Applicable if the borrower defaults |
Benefits of Taking a Gold Loan
- Instant Disbursal: Get price range within some hours.
- No Credit Score Requirement: Loan is primarily based on gold price, not credit records.
- Flexible Tenure: Choose between 3 to 36 months.
- Low Documentation: Only KYC files wished.
- Retain Gold Ownership: Your gold is lower back after repayment.
Risks Involved
- Gold Auction: If the borrower defaults, the lender might also publicly sell the gold.
- Fluctuating Gold Prices: May affect future borrowing value.
- High Rates from NBFCs: Be cautious of higher interest and hidden fees.
Step-with the aid of-Step Process to Apply for a Gold Loan
- Visit Bank/NBFC Branch or Apply Online.
- Submit KYC Documents (Aadhaar, PAN, Address proof).
- Gold Valuation via Expert.
- Loan Sanction and Agreement.
- Amount Disbursed to Your Account or Cash (in step with RBI restrict).
Conclusion
The gold loan interest price in 2025 varies extensively between 7% and 24%, relying on the lender, tenure, and purity of gold. By comparing distinct banks and NBFCs, retaining suitable credit, and choosing shorter phrases, borrowers can stabilize the lowest gold mortgage hobby price and maximize their savings.
Summary
The Gold Loan Interest Rate 2025 plays a critical function for borrowers trying to leverage their gold belongings for short financial needs. This manual covers up to date interest fees, evaluation among banks and NBFCs, EMI calculators, influencing factors, and approaches to get the bottom rates successfully.
FAQs About Gold Loan Interest Rate 2025
Is a gold loan better than a private loan?
Yes, due to the fact gold loan interest fees are usually lower, approval is quicker, and no earnings evidence is needed as compared to personal loans.
Can I close my gold loan early?
Yes, most lenders permit pre-closure anytime, however a small prepayment charge (0%–2%) can also apply relying on the lender.
How is the gold mortgage hobby charge calculated?
Interest is calculated based on important quantity, hobby fee, and tenure, frequently using simple interest formulas.
Does my credit score rating have an effect on the gold loan hobby fee?
While gold loans are secured, a desirable credit rating (above 700) can help negotiate decrease gold loan hobby charges with banks.