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Need an emergency loan? Go for gold loan

January 08, 2019 09:00 IST

'The amount you can raise via a gold loan is higher than you can get via a personal loan,' points out Sanjay Kumar Singh.

Photograph: Kham/Reuters

This is a good loan option to consider if you need money in an emergency as disbursal tends to be quick.

Lenders provide this loan for durations ranging from seven days to up to three years.

Compare the interest rates charged by various players.

They can range from 9.6% to 29%.

Take into account the processing fee as well.

It can range from 0.10% to 2% of the loan amount.


Since you are providing collateral, you should ideally be able to get a gold loan at an interest lower than on a personal loan.

But interest rate on a gold loan rises with tenure.

The amount you can raise via a gold loan is higher than you can get via a personal loan.

Banks and NBFCs usually restrict the loan-to-value ratio on a gold loan to 75%.

Check out the table below for rates and charges offered by key banks and NBFCs

Rates and charges offered by key banks and NBFCs
Bank Name Minimum loan amount Maximum loan amount Loan tenure Interest Rate Processing fee
South Indian Bank Rs 5000 Rs 10 crore 3 months-3 years

9.6%-14.65% (fixed rate)

10.85% (floating rate)

Up to 0.10% of the limit sanctioned
Bandhan Bank Rs 10000 No limit 6 months-3 years 16% 1% of loan amount
United Bank of India Rs 25,000 Rs 10 lakh 1 year 9.90% Rs 600-Rs 3,000
Muthoot Finance Rs 1,500 No limit Upto 3 years 12-26% Up to 1% of loan amount
Manappuram Finance Rs 5000 No limit Upto 1 year 9.9-29% Rs 10 (at the time of loan settlement)
Federal Bank Rs 1000 Rs 1.5 crore 3 months-1 year 13.25% Up to 0.40% of loan amount
Axis Bank Rs 25,001 Rs 20 lakh 6 months-3 years 14.75-17.25% 1% of loan amount
Oriental Bank of Commerce No limit Rs 50 lakh Up to 1 year 9.75-10.75% Up to 0.50% of loan amount
State Bank of India Rs 20,000 Rs 20 lakh Up to 3 years 10.55% 0.5% of loan amount (Minimum Rs 500)
Kotak Mahindra Bank Rs 25,000 Rs 25 lakh 3 months-3 years 10.5-17% Up to 2% of the loan amount
Bank of Baroda Rs 25,000 Rs 10 lakh Up to 1 year 11.65% onwards* 0.5% of loan amount
YES Bank Rs 25,000 Rs 50 lakh 3 months-3 years 15.85% 0.49% of loan amount
IIFL Rs 3000 Up to 75% of the gold's market value 3-11 months 9.24-24% Depends on scheme availed of
RBL Bank Rs 10,000 Rs 50 lakh 7 days to 365 days 14.5-19% Rs 100
* Bank of Baroda levies a strategic premium over and above the applicable interest rate, which depend upon customer's credit profile
Sanjay Kumar Singh