In India, gold is more than just adornment, and it is a widely trusted asset for financial security and quick access to funds. Gold loans have become an increasingly popular choice for borrowers seeking immediate cash for personal or business needs without selling their precious jewelry. This article provides an in-depth look at the best gold loans in India in 2025, highlighting lowest interest rates, top lenders, eligibility criteria and benefits to help you choose the ideal gold loan product.
What is a Gold Loan?
A gold loan is a secured loan where you pledge your gold ornaments or coins as collateral with a bank or non-banking financial company (NBFC) to obtain funds. The lender assesses the purity and value of the gold—typically in the range of 18K to 24K purity—to determine the loan amount. Gold loans usually have lower interest rates than unsecured loans due to the collateral security, and they involve minimal documentation and quick processing.
Best Gold Loan Interest Rates in India 2025
In 2025, the gold loan interest rates across top banks and NBFCs in India vary approximately between 8% and 22% per annum, based on the lender, loan amount, tenure, and gold purity. Some of the lowest rates are offered by established banks such as State Bank of India (SBI), Bank of Maharashtra, Federal Bank, and some NBFCs like Muthoot Finance and Manappuram Finance.
gold loan interest rate:
| Lender | Interest Rate (p.a.) | Loan Amount Range | Processing Fee |
|---|---|---|---|
| State Bank of India | From 7.50%* | Rs. 20,000 to Rs. 50 Lakhs | 0.50% + GST |
| Bank of Maharashtra | Starting at 8.30% | Rs. 20,000 – Rs. 40 Lakhs | Nominal |
| Federal Bank | 8.99% onwards | Rs. 1,000 to Rs. 150 Lakhs | No fee for loans below Rs. 25,000 |
| ICICI Bank | 9.15% to 18.00% | Up to Rs. 50 Lakhs | 2% of loan amount |
| Muthoot Finance | 12% to 22% | Starting at Rs. 1,500 | Rs. 100 to Rs. 1,000 |
| Manappuram Finance | 9.90% to 21.67% | Around 3 months tenor | Rs. 25 + Tax |
(*SBI’s agricultural gold loans have attractive rates from 7% p.a.)
These interest rates are subject to change depending on RBI policies, the loan-to-value (LTV) ratio (usually up to 75%), and prevailing market conditions. NBFCs generally charge slightly higher rates but offer faster and more flexible processes.
Eligibility and Documentation
Gold loans are among the easiest loans to secure with simple eligibility criteria. Most banks and NBFCs in India require:
- Applicant’s age: usually between 18 to 65 years.
- Valid KYC documents (Aadhaar, PAN card, etc.).
- Proof of ownership of gold for collateral.
- Minimal income proof; many lenders do not emphasize credit scores heavily due to secured nature of the loan.
Because the loan depends heavily on the pledged gold’s value, borrowers with good quality 18K to 24K gold have higher chances of loan approval and better terms.
Benefits of Gold Loans
Lower Interest Rates: Due to collateral, gold loans carry lower rates than unsecured loans.
Quick Disbursal: Many banks and NBFCs offer instant or same-day disbursal.
Minimal Documentation: Simplifies loan application and approval.
Flexible Usage: Loan proceeds can be used for any purpose without restrictions.
No Credit Score Dependence: Ideal for borrowers with limited or poor credit history.
Safety of Asset: Your gold remains safe with the lender and is returned on full repayment.
Factors Affecting Gold Loan Interest Rates
- Gold Price and Purity: Higher purity and current gold market price influence rates positively.
- Loan Amount and Tenure: Larger amounts and shorter tenure may attract better rates.
- Lender’s Policy: Interest rates vary among banks and NBFCs.
- Relationship with Lender: Existing customers might get negotiated rates.
How to Choose the Best Gold Loan
Compare interest rates, processing fees, and loan disbursal speed.
Check flexibility in repayment options and tenure.
Evaluate the lender’s credibility and customer service.
Use online gold loan EMI calculators to understand monthly obligations.
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