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This article contains information on Gold loan, the interest rates and the service providers for this type of loan in India.

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What is Gold Loan

What is Gold Loan
As the name suggests this is the loan given against gold. Many nationalized banks, private banks and other financial companies offer this loan at attractive rates. Many go for this loan for short period to meet the requirement of their children’s education, marriage and other financial problems in the family. And others think that instead of keeping the gold idle at home or locker, loan against gold is the best option. Moreover with the rise in gold rates the demand from companies and banks offering such loans has raised. For instance, Muthoot Finance, one of the leading gold loan companies has seen 24 percent rises in gold loan against 17 percent raise in the market value of gold.  
 
Advantages of Gold Loan
  • Gold loan doesn’t demand any certificate to show your salary or income and even no credit card history is required. Thus even unemployed and non working people can go for gold loan.
  • Unlike any other unsecured loan, gold loan doesn’t require many papers, only few documents such as ID proof and address proof is enough to avail for such loan.
  • One of the main advantages of gold loan is its low interest rates. Usually loan over gold is provided at the interest of 12-16% per annum and this is quite low compared to personal loans available at interest rates of 15-26% per annum.
  • In rural areas Agricultural loan against gold is also available for agriculturist at very nominal rate of Interest of 7%-8%, proof of agricultural document needs to be provided
  • Gold loan is the most simple and convenient forms of loan because here all you need to do is pledge your gold with a bank or finance company and get upto 80% of the market value of the gold as a loan.
  • Borrower will be given an option to pay only interest during the entire term and at the end of the tenure you can pay complete borrowed amount in single shot.
  • In case of gold loan processing time is very less. Usually banks take just few hours to complete the process where as in case of NBFC’s (Non Banking Financial Companies) a few minutes is enough for the same. So for immediate financial help this is the best option. 
Charges associated with Gold Loan:
  • Loan processing charge: While some of the service providers may waiver these charges, some banks do charge a processing fee.
  • Valuation Charge: These are the charges to be paid to the valuator. These charges are also specific to the service provider and those having in-house valuators do not charge any extra amount for valuation.
  • Late payment penalty: Most of the service providers charge late payment penalty and this too can vary from one institution to the other.
  • Pre-payment penalty: Most of the service providers do not charge a penalty for repayment before the loan tenure is over. But some may still have this charge in place.
  • It is advisable to check with the loan provider before taking the loan. These charges could change the amount that you may finally receive. 
Advise On Gold Loans
  • Go for gold loan if you are confident of returning the money in time otherwise, you will be penalized and all your pledged gold will come under the control of bank or finance company.
  • While opting for gold loan check the interest rates in various banks and private finances. If you go for private lenders then better to go with one who has been in this business for many years.
  • As far as you are not emotionally linked to your gold ornaments this is the best option. However nothing like this can help you during your difficulties and with the fall of dollars and euro many think gold is the only safe thing left. 
Documents required For Gold Loan
  • Identity proof such as passport, voters ID or driving license.
  • Address proof such as electricity bill, ration card, telephone bill etc.
  • For signature proof you need to submit your passport copy, driving license or any other document with your sign.
  • 2 passport size photographs. 
Some of the leading companies and banks offering gold are ICICI bank, Muthoot Finance, Manappuram Gold Loan, SBI and HDFC.

  • mousumi:
    I want Rs. 50000 loan. so how many grams of gold is required and what is the rate of interest?
    13-Jul-2013 09:34 AM
  • jayashree:
    Hai, this is a valuable information, thanks for providing this. I have a doubt if the massive difference happens in prices of gold after taking a loan what will be the situation. for example if i took gold loan on present day for one year term and by that time of year if spot gold price is so high or low what will impact on my loan. please answer im waiting. Thank you in advance for answering.
    11-Jul-2013 03:27 PM
  • savita:
    I want 3 lacs money with gold loan so how much gold required?
    07-Jul-2013 11:03 PM
  • atluri prasoon kumar:
    i have obtained gold loan from sbi vijayawada, i heard before taking loan that the bank will collect interest at the rate of 7% and if we paid the amount with interest within prescribed period the interest will be reduced from 7% to 4% and the interest paid by us will be deposited in to our account but i have not received till now.
    26-Jun-2013 07:48 PM
  • Kishore:
    I want 4 lacs money with agriculture gold loan in sbi so how much gold required?
    24-Jun-2013 04:11 PM
  • Esineni madhava rao:
    I want Rs.50000; how many grams gold is required and what is interest rate?
    22-Jun-2013 12:21 AM
  • sivamuthu:
    I need a loan of Rs.75,000. What will be the rate of interest? and how many gram of gold is required for that?
    17-Jun-2013 10:09 AM
  • Anil Shetty:
    Hello sir,I want 1 Lac loan, what is the interest rate ? How many grams of gold is required for loan?
    15-Jun-2013 01:54 PM
  • Subhas Sinha:
    I need a loan of Rs.2 lac. How much gold is required and what is rate of interest?
    13-Jun-2013 10:58 PM
  • vikram singh:
    I need a loan of Rs. 10 lac. How much gold required and what is rate of interest?
    11-Jun-2013 03:58 PM
  • prasanna velip:
    I need a loan of Rs.50,000. What will be the rate of interest? and how many gram of gold is required for that?
    08-Jun-2013 11:35 AM
  • gohel mukesh:
    I need a loan of 2 lacs and what will be the rate of interest?? and how many gram of gold is required for that?
    25-May-2013 12:14 PM
  • sanjay kumar dutta:
    need a loan of 1 lac. what will be the rate of interest?? and how many gram of gold is required for that?
    20-May-2013 03:46 PM
  • arvind rajbhar:
    I need a loan of 2 lacs and what will be the rate of interest?? and how many gram of gold is required for that?
    15-May-2013 02:59 PM
  • SUHAS PATIL:
    I need a loan of 3 lac & what will be the rate of interest? and how many grams of gold is required for that?
    please reply me
    15-May-2013 11:58 AM
  • fase c.v.:
    i need 5 lakh loan. how much gold is required & what is the interest rate?
    15-May-2013 09:48 AM
  • sangam devanand more:
    if i need Rs. 50000 as loan. how much gold is required?
    12-May-2013 04:32 PM
  • bibhusit korkora:
    Sir how much loan will i get for 25 gram gold ?
    09-May-2013 09:13 AM
  • Kiran Meruvala:
    I have 50 grams of gold with me. how much loan can i get on them?
    07-May-2013 01:21 PM
  • patel ravi:
    I need a loan of 3 lac & what will be the rate of interest? and how many grams of gold is required for that?
    pleas reply me
    29-Apr-2013 04:57 PM
  • P.Kanakasabapathy:
    I have availed 5 lakhs gold loan for agricultural purpose. i have closed the same within one year. What is the interest I have to pay . There is special subsidy of 3% if we close the loan with in the one year
    26-Apr-2013 08:51 PM
  • P.Kanakasabapathy:
    I have availed gold loan of 5 lakhs for agricultural purpose. What will be the interest payable
    26-Apr-2013 08:45 PM
  • Santu:
    I need a loan for 06lakhs . Can you say how much grms of gold required for this amount
    22-Apr-2013 01:17 PM
  • sarang raiter:
    i need 4 lacks rupees so how much gold i have to show u..?
    18-Apr-2013 01:05 PM
  • M S BABU:
    I NEED 2 LACS AMOUNT AND WHAT WILL BE RATE OF INTEREST AND HOW MANY GRAM GOLD IS REQUIRED FOR THAT PLZ REPLY
    17-Apr-2013 12:18 PM
  • priyanka:
    i need 3 lac amount and what will be rate of interest and how many gram gold is required for that plz reply ASAP
    13-Apr-2013 01:46 AM
  • vidyanantmate:
    I am a regular k.c..c borrower i want to know the maximum amount paid against agri gold loan
    12-Apr-2013 06:21 PM
  • dinesh:
    I need 3 lac amount & what will be the rate of interest , how many grams of gold is required for that..
    pleas reply me
    10-Apr-2013 12:05 PM
  • veerendra bharti:
    i need 4 lacks rupees so how much gold i have to show u..?
    07-Apr-2013 11:54 AM
  • subramani:
    sir,
    I want 200000 as a gold loan. how much grams should i have the gold. what is the rate of interest one year .
    06-Apr-2013 03:32 PM
  • Lokeswararao G:
    I need 3 lac amount, how many grams of gold is required for that..
    pleas reply me
    05-Apr-2013 04:52 PM
  • pankaj tiwari:
    we want gold loan pls inform to me rate of interest
    05-Apr-2013 10:18 AM
  • Rajkumar:
    I need Gold loan of 5 lac rupees
    Can you please help me with the following details.
    1. How many grams of gold is required?
    2. What is maximum tenure of repaying the principle?
    3. How much interest per month i have to pay?
    4. What is the late payment penalty amount?
    04-Apr-2013 11:29 PM
  • Nikunj:
    I need 5 lacks rupees
    So how much gold I have 2 show u ?
    Pls reply me ASAP
    27-Mar-2013 11:16 PM
  • antony:
    I want loan Rs.10 lacs, how many grams of gold required for that.
    24-Mar-2013 09:44 PM
  • JOYDEV CHOWDHURY:
    if i need Rs. 40000. how much gold is required for loan?
    19-Mar-2013 11:32 PM
  • Nikitha:
    I have 56 grams gold.how much loan can i get. I need loan details of loan for 8 and 1 grams also.
    19-Mar-2013 02:14 PM
  • Avinash:
    How much loan i can get on 100 gm gold?
    18-Mar-2013 10:27 PM
  • K. Srinivas Rao:
    what is the interest rate at SBI against gold loan?
    18-Mar-2013 07:27 PM
  • Chandrasekhar:
    Hi Sir,

    I need Gold loan of 5 lac rupees
    Can you please help me with the following details.
    1. How many grams of gold is required?
    2. What is maximum tenure of repaying the principle?
    3. How much interest per month i have to pay?
    4. What is the late payment penalty amount?

    Thanks
    18-Mar-2013 01:34 PM
  • Luv Auti:
    I want Rs. 2 Lacs Loan againt my Jewellery. Please let me know the lowest interest rate.
    Regards,
    Luv Auti
    16-Mar-2013 02:38 PM
  • surinder:
    if i need Rs. 300000. how much gold is required for loan?
    14-Mar-2013 06:45 PM
  • sapana:
    i have 20 gms of gold hw much loan i will get plz reply me soon i m in need
    14-Mar-2013 05:39 PM
  • sara:
    Loan for 1.5 lakh how many grams do i require?
    12-Mar-2013 08:44 PM
  • subhasis hazra:
    Sir,

    I want 500000 as a gold loan. how much grams should i have the gold. what is the rate of interest one year .
    11-Mar-2013 11:53 AM
  • pinky swain:
    Sir I need 1,50000.00/- . How much gold should i take.. And how much interest per month. I am a housewife . I need some money for my daughter marriage.
    07-Mar-2013 01:36 PM
  • jotiram dilip shinde:
    sir need Rs.70,000. How much gold should i take and i am farmer, how is the interest calculated
    05-Mar-2013 05:07 PM
  • monika agarwal:
    what is the rate of interest at gold loan
    02-Mar-2013 06:01 PM
  • Deepakranjan:
    dear sir,
    i want 300000/- loan on gold ornaments how much gram of gold i have to deposit for the loan.and what"s the current interest rate per annum and if i will deposit the total cash before the time then is there any penalty or my loan is clear and will i get my gold back.
    02-Mar-2013 03:46 PM
  • Ramesh Gadhekar:
    I want to be know that how much Loan I borrowing from 40 gm Gold and how much it will be charged as interest from SBI Bank.
    02-Mar-2013 02:39 PM