Go for a gold loan? Check which banks offer the best rates

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In India, gold has always been a friend in distress. The yellow metal as well as gold loans are useful in times of cash shortages or financial stress situations.

When an individual applies for a gold loan, banks keep gold jewelry or other gold items as collateral. Gold loans allow individuals to access funds without having to sell their gold. Most banks notify borrowers of repeated non-payment of EMIs and eventually the gold is auctioned off if the borrower defaults.

Here are the banks/NBFCs that offer the best gold lending rates.

  • Bank of Maharashtra offers a gold lending scheme called Maha Gold.
  • Interest rate: 7% per year
  • Maximum loan amount: Rs 5 lakh
  • Minimum loan amount: Rs 20,000
  • Processing fee: Rs 500 to Rs 2000 + GST.
  • Repayment: the maximum repayment period is 12 months
  • 2. State Bank of India (SBI)

  • SBI offers two gold loans – the SBI Personal Gold Loan and the SBI Home Gold Loan.
  • Interest rate: 7.50% per annum
  • Maximum loan amount: Rs 50 lakh
  • Minimum loan amount: Rs 20,000
  • Processing fee: 0.25% of the loan amount (minimum of Rs 250) plus applicable GST
  • Repayment: Flexible repayment options from 12 to 36 months
  • Canara Bank offers three categories of gold loan programs – Agricultural Gold Loan Programs, Swarna Gold Loan Programs and MSME Gold Loan Programs.
  • Interest rate: 7.35 to 7.65% per annum
  • Maximum loan amount: Rs 35 lakh
  • Minimum loan amount: Rs 5,000
  • Processing fee: 0.50% of the loan amount (minimum of Rs 500 and maximum of Rs 5,000 for Swarna loans and 50% of applicable Swarna loan fees for Swarna Express loans.)
  • Repayment: Flexible repayment options ranging from 6 months to 2 years
  • Interest rate: 6.80 to 7.5% per annum
  • Maximum loan amount: Rs 25 lakh
  • Minimum loan amount: Rs 1 lakh
  • Processing fee: Loan up to Rs 2 lakh: Rs 500 and for loans above Rs 2.00 lakh: 0.50% of the amount (a maximum of Rs 10,000)
  • Repayment: the maximum repayment period is 12 months.
  • Indian Bank offers gold loan programs for borrowers from middle and low income groups.
  • Interest rate: 7% per year
  • Loan amount: 80-85% of market value of pawned gold jewelry or DLTC/NABARD approved financing scale/unit cost (whichever is lower)
  • Processing fee: For a loan of Rs 25,000 to Rs 5 lakh: 0.30% of the loan amount (a minimum of Rs 300). For a loan of Rs 5 lakh to Rs 1 crore: 0.28% of the loan amount (a minimum of Rs 1,500)
  • Repayment: 6 months for Bumper Agri Jewel loan and 12 months for other Agri Jewel loan products.
  • (Edited by : Shoma Bhattacharjee)

    First post: STI

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