Looking For A Gold Loan? Here¡¯s The List Of 10 Banks That Offers Lowest Interest Rates

Gold loans are short-term solutions for immediate needs like education fees, weddings, or medical expenses. They offer benefits such as low-interest rates due to providing collateral in the form of gold jewelry, eliminating the need for additional security. Unlike car or home loans, the funds from a gold loan can be used for various purposes, and the documentation required is minimal, usually only needing address and identity proof.

Additionally, your credit history doesn't need to be perfect to qualify for a gold loan. These loans typically offer quick approval, sometimes within ten minutes, and allow you to initially pay only the interest, with the option to repay the principal later. Loan amounts vary depending on the weight of the pledged gold, with different banks offering different rates per gram.

List of banks that offer the lowest interest rates

This list considers the top 10 banks offering secured loans, based on interest rates collected from their websites as of March 12, 2024. The banks are ranked from lowest to highest interest rates. EMI calculations are based on a Rs 5 lakh loan with a two-year tenure, assuming zero processing and other charges.

HDFC Bank:

HDFC Bank offers the lowest interest rate of 8.5% on a Rs 5 lakh gold loan for two years, with a monthly installment (EMI) of Rs 22,000 (approximately).

Indian Bank:

Indian Bank charges an interest rate of 8.65% on the same loan, resulting in a monthly EMI of Rs 22,000 (approximately).

Union Bank of India:

Union Bank of India offers a slightly higher interest rate of 8.7%, with a monthly EMI of Rs 22,000 (approximately).

Bank of India:

Bank of India has an interest rate of 8.8%, resulting in a monthly EMI of Rs 22,000 (approximately).

Canara Bank:

Both banks charge an interest rate of 9.25%, with a monthly EMI of Rs 22,000 (approximately).

Punjab National Bank

Punjab National Bank also charges an interest rate of 9.25%, with a monthly EMI of Rs 23,000 (approximately).

Bank of Baroda:

Bank of Baroda has an interest rate of 9.4%, resulting in a monthly EMI of Rs 22,000 (approximately).

State Bank of India (SBI):

SBI offers an interest rate of 9.6%, with a monthly EMI of Rs 22,000 (approximately).

ICICI Bank:

ICICI Bank charges an interest rate of 10%, with a monthly EMI of Rs 22,000 (approximately).

Axis Bank:

Axis Bank has the highest interest rate of 17%, with a monthly EMI of Rs 24,000 (approximately).

(Source: Compiled by Bank Bazaar)

How is EMI calculated for gold loans?

According to the Bank of Baroda website, you can calculate your EMI (Equated Monthly Installment) by using a simple formula. The formula goes like this: EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]. Here, P stands for the principal amount, R represents the rate of interest, and N is the number of installments you'll be making.

(Disclaimer: The information provided here about gold prices, loan interest rates, and bank rankings is based on data as of March 12, 2024. While we've tried to be accurate, we can't guarantee it's current or future accuracy. Double-check with banks before making decisions. EMI calculations are for illustration and may vary. We're not responsible for any financial decisions made based on this information. Always do your own research and seek professional advice when needed.)

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