Gold Loan Interest Rates: A Detailed Guide
- Rashmita Choudhary
- Dec 2, 2025
- 10 min read
Introduction
By leveraging your gold assets, gold loans provide a quick and safe means to access liquidity, making them perfect for meeting pressing financial demands or taking advantage of opportunities without having to part with your gold. There are many competitive gold loan choices available to borrowers. Interest rates for gold loans in India in 2025 might range from 8.05% to 27% p.a., depending on the lender, loan amount, tenure, purity of the gold, and whether you choose a bank or NBFC. For borrowers, it is important to compare the rules, features, and interest rates on gold loans offered by various lenders to choose wisely.
Table of Contents
Understanding the Gold Loan Interest Rate
The percentage that banks or other financial institutions charge against the loan amount when borrowers pledge gold as security is known as the gold loan interest rate. Interest rates for gold loans in India typically range from 8% to 27% annually. Depending on the terms of the loan, borrowers may choose to pay back the interest in one single payment or in monthly installments.
Gold Loan Interest Rates by Leading Banks in India in 2025
The interest rates charged on gold loans from leading Indian banks are contrasted in the table below, along with the loan amount and term for 2025:
Bank
| Interest Rate (p.a.)
| Loan Tenure
| Processing Fee
| Limit
|
SBI | 8.75% onwards | Up to 36 months | 0.25% of the loan amount | Rs. 20,000 - Rs. 50 Lakhs |
Canara Bank | 8.75% onwards | Up to 12 months | Up to Rs. 2,750 + GST | Up to Rs. 35 Lakhs |
Union Bank of India | 9.1% - 9.35% | Up to 12 months | 0.50% of the loan amount + GST | Up to Rs. 50 Lakhs |
Indian Overseas Bank | 8.20% - 11.60% | Up to 12 months | Varies by loan amount | Rs. 25,000 - Rs. 50 Lakhs |
PNB | 8.35% Onwards | 12 months | 0.30% of the loan amount + GST | Rs. 25,000 - Rs. 25 Lakhs |
Karnataka Bank | 10.03% - 10.48% | Up to 12 months | NIL | Up to Rs. 50 Lakh |
Bank of Baroda | 9.00% onwards | Up to 36 months | Applicable charges +GST | Up to Rs. 50 Lakhs |
9.30% - 17.86% | 6 to 42 months | Up to 1% of Disbursal Amount + Taxes | Rs. 25,000 - Rs. 1 Crore | |
9.99% onwards | Up to 12 months | NIL | Rs. 3000 - Rs. 1.5 Crore | |
Central Bank of India | 8.05% - 8.35% | Up to 12 months | 0.25% of the loan amount + GST | Rs. 10,000 - Rs. 40 Lakhs |
Bank of India | 8.6% - 8. 75% | Up to 12 months | Up to Rs. 1,500 | Rs. 20,000 - Rs. 30 Lakhs |
ICICI Bank | 9.15% - 16.75% | Up to 12 months | Up to 2% of the loan amount | Up to Rs. 2 Crores |
Axis Bank | 9.75% - 17.00% | 6 to 36 months | 0.5% of the loan amount + GST | Rs. 25,001 - Rs. 40 Lakhs |
Gold Loan Interest Rates by Leading Non-Banking Institutions in India in 2025
An overview of the numerous gold loan interest rates offered by Indian financial entities outside of major banks is presented below:
Name of the Lender
| Interest Rate (p.a.)
| Processing Fees
| Loan Tenure
|
Bajaj Finserv | 9.50% - 24% | 0.15% of the loan amount | Up to 12 months |
Muthoot Finance | 12.5% - 22% | Rs. 100 to Rs. 1,000 | 12 months |
IIFL | 11.88% - 27% | up to 2% of loan amount | 24 months |
Manappuram Finance | 9.90% - 21.67% | Rs. 25 + Tax | Around 3 months |
Factors Influencing Gold Loan Interest Rates
These are a few of the variables that affect the interest rates on gold loans provided by well-known Indian banks and financial organisations.
Gold Market Rate: The RBI's Loan to Value (LTV) ratio permits banks to lend up to 75% of the value of the pledged gold. Lower interest rates result from increased collateral value brought about by a rise in gold prices.
External Benchmark Lending Rates: Interest rates on gold loans are correlated with external benchmarks such as the 10-year government bond rate or the RBI repo rate. The interest rate on your gold loan may be directly impacted by changes to policy rates.
Principal Loan Amount: Higher interest rates are usually associated with larger loan amounts. Before applying, it's critical to determine your precise requirements.
Monthly Income: Lenders are reassured by a steady monthly income that you can repay them, which frequently leads to reduced interest rates.
Credit Rating: Your chances of obtaining a reduced interest rate are increased with a high credit score (CIBIL score). A solid credit history is seen by lenders as an indication of consistent payments.
Calculation of Gold Loan Interest Rate
The following mathematical method can also be used to determine the interest amount due on a gold loan, which is based on the interest rate.
P x R x (1+R)^N / [(1+R)^N-1]
P = Principal amount R = Rate of Interest (annual) N = Loan tenure (in months)
A gold loan calculator is an easily available online financial tool that determines the approximate amount of the loan you are eligible for. Along with the monthly EMI cost, it can also calculate the interest you will have to pay on a gold loan. Borrowers who intend to apply for a gold loan find this tool useful since it provides them with an approximation of their payback obligation.
Gold Loan Processing Fee and Appraiser Charges
The processing fee and appraiser charges on gold loans given by some top banks in India are listed below:
Axis Gold Loan
Rs. 300 per case (for fresh loan up to Rs. 3 lakh)
0.5% of the loan amount (for renewed loans above Rs. 2 lakh)
BOB Gold Loan
Nil up to Rs. 3 lakh
Applicable according to the bank’s terms and conditions (with GST) for loans above Rs. 3 lakh up to Rs. 50 lakh
Canara Gold Loan
0.50% of the loan amount (min Rs. 500, max Rs. 5,000) for Swarna Overdraft Gold Loan
Rs. 2,750 for MSME & Agricultural Gold Loans above Rs. 10 lakh
Central Bank of India: 0.50% of the loan amount (min Rs. 250, max Rs. 5,000)
Federal Gold Loan: Up to 3% of the loan amount + GST
HDFC Gold Loan: Up to 1% of the disbursal amount, which includes applicable tax
IDBI Bank Gold Loan: 1%
Indian Bank Gold Loan: Nil
IndusInd Bank Gold Loan: 1% of the loan amount + GST
Karnataka Bank Gold Loan: No limit specified
Kotak Gold Loan: Up to 2% of the loan amount + GST
PNB Gold Loan: 0.30% of the loan amount + GST (or Rs. 500 + applicable tax, whichever is higher)
SBI Gold Loan
Rs. 200 + GST (3-month Bullet Repayment)
Rs. 300 + GST (6-month Bullet Repayment)
0.50% of loan amount (min Rs. 500, max Rs. 10,000 + GST) for 12-month Bullet Repayment
0.50% of loan amount (min Rs. 500 + GST) for EMI-based loan
Features of Gold Loan
For those who need immediate access to money by pledging their gold assets, gold loans offer a practical and safe borrowing option.
Secured with coins or gold jewellery.
Fast payment and little paperwork.
Brief terms of payback, from three months to three years.
There are three ways to pay interest: EMI, bullet payback, and partial prepayment.
Credit score has no bearing on loan approval, but it might have an impact on interest rates.
Reduced interest rate in contrast to a personal loan.
Gold that has been pledged is recovered upon successful repayment.
Eligibility for Gold Loan
Each lender has different requirements for eligibility for a gold loan. Therefore, before submitting an application for a gold loan, review the requirements listed on the lender's website. The majority of Indian lenders have established the following standard qualifying requirements for gold loans:
A candidate must be at least eighteen years old.
In order to secure the loan, he or she must pledge gold jewellery or other items.
As security, the applicant must guarantee at least 18 carats of gold.
Documents to Apply for a Gold Loan
Depending on the terms and conditions of the lender, different lists of documents are needed when applying for a gold loan. The following paperwork is typically required for a gold loan:
Properly completed and signed application for a gold loan.
Current passport-sized photos of the candidate.
Evidence of identity (such as a driver's license, voter ID card, or Aadhaar card).
Proof of Address: Utility bills, tenancy agreement, passport, etc.
Age verification (a birth certificate or a pass certificate from school).
Signature proof.
Additional post-loan disbursement records (if necessary).
Steps to Apply for a Gold Loan Online
Step 1: Go to the lender's official website.
Step 2: Go to the "Loan Products" section and select "Gold Loan."
Step 3: Locate and select the "Apply Now" tab on the "Gold Loan" website. A new page with an application form will be displayed after you are redirected.
Step 4: Carefully fill it out with all the necessary information.
Step 5: After checking, click the "Submit" tab.
Steps to Apply for a Gold Loan Offline
Step 1: Bring the necessary paperwork to the closest branch of the lender of your choice.
Step 2: Get a gold loan application form and speak with a branch representative.
Step 3: Complete the form accurately and provide the necessary paperwork.
Step 4: Send it to the branch agent.
Your gold loan will be handled and approved after your application is received and validated.
Closing a Gold Loan
A gold loan can be closed in four different ways. Let's go into more detail about these approaches.
By making principal payments and interest payments as EMI: With this approach, borrowers pay the interest over the course of the loan in tiny monthly installments (EMIs). At the conclusion of the term, the principal is paid in one lump sum.
By making EMI payments: Over the course of the loan, borrowers make equal monthly EMIs for the principal and interest. For paid people with a steady monthly income, this approach is perfect.
By using bullet repayment: At the conclusion of the loan period, borrowers using this approach pay the full principal and interest in one big sum. For people whose incomes fluctuate, it offers flexibility.
By foreclosing or paying partial payments: By paying the principal and interest in full or in part before the loan term expires, borrowers have the option to return the loan early. By doing this, interest expenses can be reduced and the promised gold objects can be returned sooner. It is appropriate for people who are financially stable.
Conclusion
Borrowers should always look for the lowest gold loan interest rates with flexible terms, even if gold loans might be an alluring funding choice. Before selecting this choice, it is equally crucial to assess your financial capacity to repay the loan and make sure you can comfortably fulfil the repayment responsibilities.
Frequently Asked Questions
How to calculate the interest rate for a gold loan?
A mathematical formula or an internet calculator can be used to quickly calculate the interest on a gold loan.
Are gold loan interest rates fixed or floating?
Interest rates on gold loans can be either fixed or variable. While NBFC lenders may provide both choices, banks typically offer fixed rates.
Which bank offers the lowest gold loan interest?
At 8%, Kotak Mahindra Bank has the lowest interest rate for gold loans.
Are interest rates from banks lower than NBFCs?
In general, banks provide lower interest rates than NBFCs. On the other hand, NBFCs provide more flexible terms and quicker processing.
Can I negotiate the gold loan interest rate?
Yes, you can bargain the interest rate, particularly if you have a solid rapport with the lender or promise heavier and more pure gold.
What is the interest of a Rs. 1 lakh gold loan?
Depending on the type of lender or the current state of the economy, the interest rate on a loan secured by Rs. 1 lakh gold can range from 8% to 24%, or even more.
Can we get a 100% gold loan?
No, a 100% gold loan is not available. In India, a person can get a loan equal to up to 75% of the current market value of their gold.
What are the limitations of a gold loan?
A gold loan carries significant dangers despite being a desirable financing choice. The potential for the lender to freeze your pledged items and sell them at auction in order to release the remaining loan balance in the case of default is a significant drawback of such a loan.
What is the highest amount for a gold loan?
The maximum loan amount for gold in India is Rs. 1.5 crore.
What is the maximum gold loan amount in SBI?
The State Bank of India will only lend up to Rs. 50 lakhs against gold.
How can I check the status of my SBI gold loan?
By going to the State Bank of India's official website, you can monitor the status of your SBI gold loan. You must enter your ISD code, reference number, and mobile number for this.
What are the main factors that determine my gold loan interest rate?
The loan amount, gold weight and purity, loan duration, applicant income, credit history, and current gold market rate are the primary determinants.
What is the interest rate for agricultural gold loans?
Leading banking organisations offer agricultural gold loans with an interest rate of 7%.
Will the interest rate on my gold loan vary with the kind of jewellery pledged?
The type and purity of the gold jewellery you promise will determine the interest rate on gold loans. The lender's approved loan amount will also depend on the quality of the gold. The jewellery appraiser at the bank will verify that the gold ornaments must be between 18,000 and 24,000 karats in order to qualify for a gold loan. The weight of the precious stones used to adorn the gold decorations will not be taken into account.
Will my credit score affect the interest rate on my gold loan?
No, when you apply for a gold loan, lenders won't consider your credit score. You can apply for a loan if you are older than eighteen and have documentation proving you are the rightful owner of the gold.
Can a farmer get a discount on the gold loan interest rates?
Yes. Farmers who want to use gold loans to finance their infrastructure or other farming-related expenses might receive a discount on the interest rates because agriculture is a priority sector. They can obtain gold loans at interest rates as low as 8% because the rebate might vary from 1% to 2%.
Can I make a part-payment of the gold loan?
The majority of lenders will accept partial payments; however, there may be a fee. Before making a partial payment on your gold loan, be sure to check for any charges. However, you will need to pay back the whole sum owed in order to receive your jewellery back. However, if you need it, certain lenders will be prepared to release a portion of your gold jewellery.
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