Gold is one of the most precious and celebrated metals in India. Buying and gifting gold is an old tradition of our culture. However, the service of Loan Against Gold has changed the scenario of how people use this metal. Nowadays, people buy Gold to overcome financial troubles in life.
What is Gold Loan?
Gold Loan is the fastest growing financial service in the banking industry. Majority of people have gold ornaments which are just lying in the bank lockers or at home. Thus, Loan Against Gold provides an opportunity for the people to unleash the worth of this valuable yellow metal by availing a gold loan against them.
How does Gold Loan work?
Our country has about 10% of the total gold stock in the whole world. Thus, the majority of people own gold ornaments in India. Loan Against Gold is a service that helps people to get cash against the gold they own. The mechanism of this service is quite simple and clear.
- The applicant just has to pledge gold jewelry to the lender in return for the loan amount. After you take your jewelry to the bank, the in-house jewellers access your gold jewelry in terms of purity and weight.
- Then, according to the value of gold, the lenders give the loan seekers cash equivalent to around 70%-75% of the value of their gold.
- Now the lender has the possession of your gold ornaments until the full repayment of the loan amount.
- Finally, when you repay the whole amount of loan, the bank returns the gold in the same shape to the customer.
This is the entire process of the service of Loan Against Gold. Thus, the Documents required are quite minimal as the bank is majorly concerned about the quality and quantity of Gold.
What is Gold Loan Interest Rate?
Gold Loan is a service that provides its customers with cash at the best rate of interest. In contrast to other services like Personal Loan and Home Loan, Loan Against Gold Interest Rate is quite less and reasonable. On average it starts at 10.75% per annum and can go up to 24% per annum. Different Banks and NBFC’s provides different interest rate to the customers.
*Read more about Gold Loan Interest Rate and compare them.
Gold Loan Interest Rate of Major Banks
| Bank | Gold Loan Rate |
| HDFC Bank | 10.75% |
| Yes Bank | 10.85% |
| Axis Bank | 10.90% |
| SBI Gold Loan | 11.50% |
| Private Bank | 11.75% |
| IIFL Gold Loan | 11.75% |
| Allahabad Bank Gold Loan | 11.75% |
| Muthoot Gold Loan | 12.00% |
| Federal Bank Gold Loan | 12.00% |
| Manappuram Gold Loan | 12.25% |
| IDBI Bank | 12.25% |
| PNB Gold Loan | 12.25% |
FAQ’s for Gold Loan
Ques1: What is Gold Loan Interest Rate Formula?
Loan Against Gold Interest Rate varies in different banks. Mainly, it depends upon the amount of loan and LTV ratio of the gold. To check interest rate, Click Here.
Ques2: How to pay Gold Loan Online?
You have an option to pay a gold loan online through online repayment applications.
Read More: Best Methods of Repaying Gold Loan
Ques3: How does Gold Loan Work?
Loan Against Gold is very simple to understand as well as easy to avail. The Bank provides you with funds against your gold Jewelry. The amount depends upon the gold weight.
Ques4: Gold Loan is secured or not?
Ques5. When you don’t repay a Gold Loan amount?
Ques6. What is the best online platform to avail gold loan?
* For any assistance regarding Gold Loan, call us on 95920-46860, our trained Relationship Managers will solve all your queries.