Top 10 Gold Loan Companies in India

The lending bank or Non-Banking Financial Company (NBFC) accepts gold goods, including gold jewellery, ornaments, etc., as collateral for gold loans.

A loan secured by gold requires the borrower to give the lender a pledge of their gold jewellery, as security. In return, the lender offers a simple loan with affordable interest rates. After maintaining a sufficient margin to account for price fluctuations in the market, the gold’s current market value serves as the basis for the loan amount. 

Simple and minimal documents are necessary for a loan against gold.

Features of the Best Gold Loan Companies in India

The first step in obtaining a gold loan is deciding the loan amount required to meet the capital needs. Choosing the lender from whom you should acquire a gold loan is the second and most crucial step. Here is how to compare your alternatives and choose the best gold loan company in India:

Security

You must use your gold as security to get a loan against it. The safety of the gold must come first because the lending company will store your gold goods until you repay the loan. Tenure Options

The tenure options significantly influence the interest rate and Equated Monthly Instalment (EMI) alternatives for loan repayment. As the loan term lengthens, the monthly EMIs fall. Finding a lender with various term options is ideal if you want to manage your money wisely and fulfil your loan obligations.

Rates and Charges

Gold-backed loans come with several costs, such as processing fees, appraisal fees, late payment fees, etc. Even though these expenditures are typical, the lender must disclose all costs, including hidden charges.

Repayment Options

Like tenure options, flexible repayment options from the lender must include EMIs and one-time and recurring interest payments. The more repayment options, the better.

Top 10 Gold Loan Companies in India

These are the top 10 gold loan companies in India:

Muthoot Finance

Muthoot Finance is one of the biggest gold loan companies in India. It has a massive network of 4,265 branches scattered over 21 states and four union territories and is well-known for its standing in the sector.

Customers can get a loan for up to ₹1 crore approved against their jewellery in only five minutes. Whereas, Muthoot High Value Loan Scheme has no maximum limit on the loan amount. The loan application procedure is easy and quick. By mutual agreement, the maximum payback period may extend to 36 months.

• Interest rate – 12% p.a. onwards
• Loan amount: minimum – ₹1,500; maximum – no limit 
• Loan tenure – 7 days to 36 months
• Any gold item up to 50 grams in weight with a purity of 18K to 22K is secure
• Processing fee – 0.25-1% of the loan amount

Manappuram Finance

A well-known name in the finance sector, Manappuram Gold has 3,200 locations nationwide. It is known for its reliability and speedy loan processing. Manappuram approves and pays out gold loans in five minutes.  

It provides a wide range of programmes suitable for individuals of all income levels with a maximum loan amount of ₹1.5 crore. The maximum repayment period is 15 months. However, the extension of tenure is possible with consent.

• Interest rate – 12-29% p.a.
• Loan amount – ₹1,000 to ₹1.5 crore
• Tenure – 3 months to 12 months
• Processing fee – ₹10 at the time of loan settlement period; additional processing fee on repledge – 0.07% of new pledge value

Union Gold Loan

The Union Gold Loan focuses on poor farmers and those who need money immediately. It is an initiative by the Union Bank of India. The loan will only be available for gold jewellery and coins purchased from banks. The Union Bank of India currently lends 22-carat gold jewellery at 75% of the value of gold. So the maximum you can borrow is ₹20 lakh. 

• Interest rate – 8.65% p.a. onwards
• Loan amount – ₹3,000 onwards
• Tenure – up to 12 months
• Loan disbursal time – 30 minutes
• Processing charges – 1% of the loan amount

State Bank of India Gold Loan

SBI has a sizable branch network. The longest loan term offered by SBI to customers is 36 months. The SBI gold loan scheme is also available to farmers in rural areas. The procedure for opening a gold loan is the same for customers opening new bank accounts.

• Interest rate – 7.3% p.a. onwards
• Loan amount – ₹20,000 to ₹50 lakh
• Tenure – up to 3 years
• Age – 18 years and above
• 0.5% of the loan amount is the  processing fee

Kotak Mahindra Gold Loan

For immediate needs, a twelve-month Kotak Mahindra gold loan is available. The tenure may get extended more based on the circumstances. Collateral for gold loans may only be bank-minted coins up to 50 grams per client and gold jewellery 18 to 22 karats.

• Interest rate – 8% p.a. onwards
• Loan amount – ₹20,000 – ₹1.50 crore
• Tenure- 12 months to 3  years
• The bank accepts jewellery and gold coins
• 2% of the loan amount is the processing fee

ICICI Gold Loan

The Industrial Credit and Investment Corporation of India (ICICI) Bank has a gold loan plan with a guaranteed approval period of 30 minutes.

• Interest rate – 11% p.a. onwards
• Loan amount – ₹10,000 to ₹1 crore
• Tenure – 6 months to 12 months
• Processing fee – 1% of the loan amount
• Documentation charges – ₹199
• Disbursal time – 60 minutes

HDFC Gold Loan

The Sampoorna Bharosa gold loan programme of the Housing Development Finance Corporation (HDFC) Bank has recently undergone numerous changes. HDFC gold loans are outstanding for emergencies because they need less paperwork and it can give approval in 45 minutes.

• Interest rate – 11% onwards
• Loan tenure – 3 months to 24 months
• Loan amount – Loans starting at ₹25,000 (Minimum loan amount of ₹10,000 available in rural markets)
• Processing fees – 1% of the loan amount
• Custody – Stored under a unique triple-layered security

Axis Gold Loan

Axis Bank is a private-sector bank that offers gold loans to its customers at reasonable interest rates. In addition, for unique requests, Axis Bank provides gold loans with same-day disbursals. The bank guarantees excellence, transparency, and a superior customer experience with its gold loan product.

• Interest rate – 17% p.a. onwards
• Loan amount – ₹25,000 to ₹25 lakh
• Tenure – 6 months to 3 years
• Age – 18 to 75 years
• Accepted gold items include jewellery and gold coins purchased from banks
• Processing charges – 1% of the loan amount

Central Bank of India Gold Loan

Customers of the Central Bank of India can borrow gold under the Cent Personal Gold Loan programme up to 50 grams. The most considerable loan amount is either 1,750 per gram or 70% of the market price of 22-carat gold.

• Interest rate – 8.2% p.a. Onwards
• Loan amount –  ₹10,000 to ₹20 lakh
• Tenure – up to 12 months
• Age – 18 to 70 years
• The bank accepts ornaments, jewellery, and specially minted gold coins sold by banks
• Processing charges – 0% up to ₹5 lakh, and for loan amounts between ₹5 lakh to ₹20 lakh, it is ₹250 per lakh or part thereof

Federal Bank Gold Loan

Federal Bank offers a hassle-free borrowing option. Customers can access fast gold loans with customizable payback periods up. The Federal Bank gold loan is reliable, has no extra costs, has low processing costs, and is sure to be affordable.

• Interest rate – 8.64% p.a. onwards
• Loan amount – ₹1,000 to ₹1.5 crore
• Tenure – 6 months to 12 months
• Rate per gram – 85% of the gold price per gram

Conclusion

It is reasonable to conclude that using gold assets as collateral for affordable financial loans is better than using private loans. The companies above are among the best in India for gold loans. You can apply for gold loans from these NBFCs or banks. Select your Know Your Customer (KYC) documents and continue with the loan application either personally or online to receive the needed money quickly.

Frequently Asked Questions (FAQs)

How is a gold loan different from other loans?

A gold loan is a loan taken out with the vendor accepting gold jewellery or coins as collateral. If you need money in an emergency, you can pledge your gold jewellery, including your watches, bangles, earrings, necklaces, and bracelets.

Your possession of all the gold objects you promised will get restored once the loan is closed. 

What is the prepayment option?

Like any other loan, the borrower in a gold loan must pay back the principal and interest after the loan’s term or in monthly instalments. However, the entire sum, including accumulated principal and interest, may be prepaid before the tenor’s expiration or while the term is still in force. Few banks and NBFCs do not charge fees for early payments, while some do.

What happens if a borrower is unable to repay their loan balance?

At the end of the term, the bank or NBFC would send monthly payment reminders. Following this, the borrower gets the final notice about the auction. After that, they will auction your gold deposit if you don’t repay the loan.