Gold loan is a preferred option within the secured loan category since an applicant can get instant funds by keeping their gold jewellery as collateral. It allows people to use their gold ornaments, which otherwise would have been kept away in a locker, lying idle. 

The funds received can be used for any sort of business purpose like the purchase of an asset or paying off a liability or for working capital requirements. Besides raising funds for business requirements, gold loans can also be used to meet any personal emergency. However, note that as per RBI directives, the loan amount cannot be used to buy gold coins, jewellery, betting or for any other speculative purposes.

Read on to find out the top banks which provide gold loans at competitive interest rates.

Top 10 Banks/NBFCs for Gold Loans in India

Here are the top 10 banks/NBFCs which offer gold loans at competitive rates in India.

  Bank/NBFC Interest Rate Loan Amount Loan Tenure
1 Muthoot Finance 12%-26% Rs 1500-No Limit

7 days-12 months (normal schemes)/36 months (EMI based Scheme)

2 IIFL 9.24%-24% Min Rs.3000

3 months -11 months

3 HDFC Bank 11%-16% Rs.10,000 (In rural market)
Rs.50,000 (Others)

3 months -24 months

4 ICICI Bank 11%-19.76% Rs10,000-Rs15 lakhs

3 months-12 months

5 Canara Bank Up to Rs. 5 Lakh:9.85%
Above Rs.5 lakh:9.95%
Rs.10,000-Rs.10 lakhs

12 months (Borrower needs to pay in lump sum)

6 Axis Bank 14% (1 year MCLR + Spread over 1 year MCLR-8.15%+5.85%) Rs.25,001-Rs.20 lakhs

6 months-3 years

7 Manappuram Finance 12-29% Rs 5,000-Rs.1.5 crore

90 days-365 days

8 Federal Bank 9.50% Rs 1000-Rs 150 lakhs NA
9 Bank of Baroda Depends upon MCLR Up to Rs.25 Lakhs 12 months
10 SBI Bank 9.15% Rs 20,000-Rs 20 Lakhs Max: 36 months


Top Gold Loan Lenders in India 

  1. Muthoot Gold Loan: Muthoot Finance has various gold loan schemes on offer. It allows the customers to choose as per tenure and loan amount preference. The gold items kept with Muthoot finance are safe and in tamper-proof packaging. Some of the key features of Muthoot gold loan are:

    1. Partial repayment towards the gold loan is allowed

    2. The minimum loan amount that can be availed by a customer is Rs.1500 with no maximum limit

    3. Pre-payment option available without paying any penalty

  2. IIFL Gold Loan: IIFL is known for its varied services and it also offers a gold loan with interest rate starting at 9.24%. It gives gold loans against the gold of purity over 18K. Some of the features are as below:

    1. A portion of the pledged gold can be released by making part payment

    2. Bullet repayment mode is available. It allows paying loan amount at the end of the tenure

    3. In case you are foreclosing your account before 3 months, a nominal closure charge of up to Rs. 150

  3. HDFC Gold Loan: HDFC Bank offers gold loans under the scheme name ‘Sampoorna Bharosa Gold Loan’ to customers. It offers special offers and rates for existing account holders of the bank. Key features are as given below:

    1. It has 1.5% charges plus GST as processing charges

    2. Women customers are given special and preferential interest rates.

    3. In case you foreclose your account within 3 months, customer needs to pay foreclosure charges of 2%+GST

  4. ICICI Gold Loan: Applicants within the age group of 18 to 70 years can avail ICICI Bank gold loan as long as the purity of gold jewellery is above 18K. The loan sanctioning and disbursal process are simple and fast. Key features are listed below:

    1. Customers are charged 1% of the loan amount as processing fees

    2. The borrower needs to pay 6% per annum if the customer pays after the due date

  5. Canara Bank Gold Loan: Swarna Loan scheme is designed by Canara bank to offer gold loan against the security of gold ornaments provided s/he has an account with the bank. Key features of Canara bank gold loan are:

    1. Rate of interest varies depending upon the loan amount. If it is up to Rs. 5 lakhs then the borrower will be charged 9.85% and if it is above then 9.95%

    2. Jewel appraising charges, a document describing the total valuation of your gold jewellery given by a jeweller, will be paid by the borrower

    3. Over and above the amount, the borrower needs to pay 1% of the loan amount subject to minimum Rs. 1000 to maximum Rs. 5000

  6. Axis Bank Gold Loan: The age criteria for Axis bank gold loan is 18 to 75 years and applicants must own gold ornaments such as gold necklace, chain, ring, solid bangles, mangal sutra, etc. One can avail gold loan facility from Axis bank provided the purity is over 18K. Other main features are given below:

    1. Minimum loan amount starting from Rs. 25,001

    2. Comes with flexible repayment options-EMI/paying the interest and principal amount on the date of maturity

    3. No charges on part payment throughout the loan tenure

    4. The borrower needs to pay 1% processing charges

  7. Manappuram Gold Loan: Manappuram Finance offers the highest loan to value option to those who wish to avail the maximum amount of loan against their gold jewellery. Other main features are listed below:

    1. There is no need for a bank account if the transaction is less than 1 lakh

    2. No prepayment penalty if you choose to repay earlier before the tenor.

    3. Manappuram gold loans do not have any minimum or lock-in period

  8. Federal Bank Gold Loan: One can avail gold from Federal bank for personal, business and agriculture purposes provided the gold they are pledging are of 22K

    1. Minimum one can avail the gold loan is of Rs 1000 to maximum Rs 150 lakh

    2. Gold loan one can get is 82% of the Market loan (for Agri loan) and 75% for others

  9. Bank of Baroda Gold Loan: Bank of Baroda offers gold loans to both priority and non-priority sectors such as agriculture provided the gold you are pledging are of 18K.

    1. No pre-payment/pre-closure charges

    2. No processing charges for loan up to Rs 3 lakh if taken for Agriculture purpose

  10. SBI Gold Loan: SBI offers gold loan to anyone with a steady source of income. It also offers loans specifically for SBI housing loan customers and for those who are engaged in agriculture activities.

    1. Minimum gold loan one can avail is Rs. 20,000 to maximum up to Rs. 20 lakhs

    2. Borrowers need to pay 0.50% of the loan amount as processing charges.

End Note

Based on a comparison of gold loan rates of all banks, HDFC Bank, ICICI Bank, Axis Bank, IndusInd Bank give the lowest gold loan interest rates in the range of 9.90% to 11.5%. Similarly, based on a comparison of processing fees, IIFL, Federal Bank, Andhra Bank are the best banks to take a loan against gold as they charge the lowest processing fees of Nil Charges.