India’s love for gold is unparalleled. We love buying and gifting gold every time we get a chance to do so. For us Indian’s, this shiny metal is much more than a fashion statement. It sometimes even holds religious and traditional significance. Most of us do own different pieces of gold jewelry that we use quite rarely or that which is kept securely in a bank vault.
However, the best part is yet to come. These pieces of treasured jewellery can come handy when you are in need of money. Yes, gold is one of the easiest ways by which you can get a loan from a bank. The amount that you receive as a loan depends on the value and weight of the gold you’ve decided to pledge.
What Do You Mean By A Gold Loan?
Loans that are granted to an individual against gold in any form (jewelry, coins, bars, etc.) that are deposited in a bank is referred to as gold loans. The process involved in getting a loan from banks is quite simple. Hence, it is one of the easiest ways to avail short-term loans for urgent personal needs.
On approaching a bank with your gold jewelry a valuation is carried out to determine its weight and purity. Certain banks also request for proof to ensure that the ornaments belong to you or your family members. The loan is sanctioned by the bank once the process of valuation is completed. A maximum LTV or Loan to Value ratio of 75% can be availed from a bank. Let’s take a look at some of the best banks to apply for a gold loan.
Gold Loans Provided By Different Banks: Rate Of Interest, Processing Fee And Maximum Time Period
|Name Of The Bank||Rate Of |
|Processing Fee||Maximum Time Period|
|SBI||10.55%||0.50% of the loan amount taken||36 Months|
|HDFC Bank||11.50% – 15.00%||0.50% – 2% of the loan amount taken||24 Months|
|ICICI Bank||10.00% onwards||1% of the loan amount taken||12 Months|
|Axis Bank||15%-17.5%||1% of the loan amount taken||24 Months|
|Punjab National Bank||10.05%||0.70% of the loan amount taken||12 Months|
The Best Banks For You To Apply A Gold Loan: Based On Rate Of Interest
- Punjab National Banks (PNB) provides a gold loan at a rate of 10.05% of interest and SBI at a rate of 10.55% of interest which is the lowest rate provided by any banks.
- Though ICICI offers gold loans at an interest rate beginning at 10.00% it could go up to a maximum of 16.70%.
- Both SBI and PNB offers the lowest amount of processing fee which is 0.50% and 0.70% respectively so these banks would be the best choice based on processing fee.
- Even though HDFC bank’s processing fee also starts at 0.50% it could go up to a maximum of 2% which is the highest charge among all banks.
Maximum Tenure For Gold Loan
- SBI offers the maximum time period to close a bank loan which is 36 months which makes it the best choice to apply for a gold loan from.
- ICICI and Axis bank allows 24 months each whereas a period of 12 months is the maximum time allowed by PNB and HDFC bank.
The Documents Required
- Proof of Identity (Election ID Card/ PAN Card/ Aadhaar Card/Passport)
- Proof of Address (Passport/Bank Statement/Electricity Bill)
- 2 Passport size photographs
Though quite similar to a personal loan, a gold loan does not have end-use restrictions attached to it. People usually take a loan to meet immediate needs like a medical emergency, for the education of children or to conduct a wedding. The interest rates of a gold loan are the lowest compared to the other loans and it can be taken from public, private or nationalized bank.
Compare the processing fees, interest rates and maximum tenure offered by the different banks and choose the best one that suits your need. Once the valuation of the gold jewelry and the verification of the documents are completed the bank releases your loan immediately.
This blog is maintained by the Finaura team. Finaura is a solution that will help you find the best gold loan solution from gold loan company nearest to you. If you have any queries please feel free to contact us. Call us on +91 484 2388285 or email us at [email protected]