Looking for the cheapest Gold Loan? Check the 6 best lenders with the lowest interest rates
New Delhi: The economic expert and writer Norm Franz, in his 2002 book “Money and Wealth in the new Millennium” wrote: “Gold is the money of kings”. And while money rules almost all transactions today, another equally dear thing to Indians is gold!
While some think gold can be a great financial instrument in times of distress, others have an endless love of it.
Gold can certainly come to the rescue during tough times like the Covid-19 pandemic in the form of gold lending. Simply put, gold loan is a loan secured by gold. It is a secured loan in which the lending bank/NBFC takes gold items like jewelry, ornaments as collateral. The borrower receives a loan with this gold as collateral.
A key thing to keep in mind when applying for a gold loan is the interest rates offered by banks. Here are 6 banks with the cheapest gold loans:
- Bank of Maharashtra is offering 7.00% loan with processing fee of Rs 500 to Rs 2000 + GST.
- The public sector bank SBI charges an interest rate of 7.00% to 7.50% and a processing fee of 0.50% + GST.
- The interest rate of Punjab & Sind Bank Gold loan ranges from 7.00% to 7.50% and the salary from Rs 500 to Rs 10000 max.
- The interest rate offered by Union Bank is 7.25% to 8.25%.
- Canara Bank grants loans at a rate of 7.35% with processing fees ranging from Rs 500 to Rs 5000.
- Indian Bank Gold Loan can be availed at an interest rate of 7.50% to 8% with a processing fee of 0.56% of the sanctioned limit.
Documents needed to apply for a Gold Loan:
A person’s ID (PAN, Aadhaar, etc.) and proof of address (Aadhaar, passport, voter card, etc.) are usually required, along with their photograph. The lender may also request any additional documentation.
In addition to the processing fee, the applicant may be required to pay the gold appraisal which will be used as collateral by the lending institution.
Minimum and maximum gold loan amount:
This may vary by lender. SBI offers gold loans ranging from Rs 20,000 to Rs 20 lakh. Muthoot Finance, on the other hand, offers gold loans starting at Rs 1,500 with no maximum restriction.
Term of the loan :
This also varies by lending bank/NBFC.
Entering the gold loan:
An applicant can repay the full amount before the end of the loan, if he wishes. It should be noted that gold loans usually have pre-closing fees and vary depending on the lender.
What happens in case of non-payment?
According to the HDFC Bank website, “If the gold loan sum is not paid despite repeated follow-ups, the bank will sell or auction the gold ornaments to recover the loan money.”