Cash crisis? Get a Gold Loan with an Interest Rate of Less than 8% – Compare Rates and EMIs


A gold loan is a secured loan contracted by a borrower against physical gold. The loan amount is determined based on the current market value and purity of your gold. It is quickly sanctioned and the disbursement process is also easy as you get funds against your gold.

Any businessman, employee, self-employed or any other category of borrowers can apply for a gold loan. Since there is a minimum documentation process, the loan is processed within hours to days. You can use the loan to meet any requirement, be it a medical emergency, a wedding, home renovations or a trip abroad. Apart from depositing your gold, you do not need to submit any other collateral or collateral to the lender.

Since your gold serves as collateral, the interest rate on a gold loan is lower than for unsecured loans. Gold jewelry is rarely used to generate funds, but gold loan can help you raise funds to meet your financial needs.

Whenever you need money and want to use your gold, you can apply for a gold loan on mutually acceptable terms and conditions. Often, gold loans are disbursed once the lender is satisfied with the purity and quantity of your gold according to your loan requirements. Additionally, the lender may ask you to show proof of ownership to avoid litigation. You may need to submit basic KYC to establish your identity before your gold loan is taken out to give you funds.

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Suppose you fail to repay your gold loan. In this case, the lender sends you the reminders, and after a period stipulated according to the contract, penalty fees and interest are levied on the unpaid amount. After reminders, if you don’t pay, the lender may auction or sell your gold to recover the loan amount. You can repay the gold loan in easy EMI calculated based on interest and term. You can choose to repay monthly, or some lenders may give you options to make a one-time payment after a specific term. The repayment term can vary between 1 and 5 years, but this can vary from one lender to another.

You can also foreclose or prepay your loan in gold, but the lender may charge you an additional fee if you want to prepay within one year of the loan. Before signing the loan agreement, you must check foreclosure charges and other terms and conditions.

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Finally, you should compare the interest rates of different lenders and EMIs based on the term you select and ensure that you are comfortable with servicing the loan as per the loan agreement. Avoid late payments or defaults, as this could affect your credit score and make it harder for you to borrow in the future. Choose a reputable lender who can provide security for your gold items and return them to you on the same terms you gave them.

The table below will help you compare the interest rates of a gold loan for Rs 5 lakh for a term of 2 years with the EMI. You can choose according to your needs.

Interest rate and EMI on gold loan

Compiled by

Note: Interest rates on gold lending for all listed public-pvt banks (BSE) and selected NBFCs considered for data compilation; Banks whose data is not available on their website are not taken into account. Data collected from respective bank’s website as of August 23, 2022. Banks are listed in ascending order on the basis of interest rate, i.e. the bank/NBFC offering the lowest interest rate. lowest on the gold loan (for different loan amounts) is placed at the top and highest at the bottom. The lowest rate offered by the banks/NBFC is taken into account in the table (regardless of the loan amount). The EMI is calculated on the basis of the interest rate mentioned in the table for the loan Rs 5 Lac with a duration of 2 years (processing fees and others are assumed to be zero for the calculation of the EMI); **with discount.


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