Gold loans are the loans that one can get by assuring their gold ornaments (within the range of 18-24 carats). The demand for a gold loan has increased been increased strongly after the Covid-19 pandemic. Many businesses and families got affected a lot after the pandemic. People switched to gold loans as they are the easiest way of credit. Gold loan is beneficial because the lenders never check out the borrower’s credit profile and repayment capacity.

Different banks with variable interest rates:

Several banks provide gold loans with different interest rates; here is the list of the top 5 Banks/ NBFCs that provide gold loans at reasonable rates:

Muthoot Finance:

Muthoot Finance provides its customers with various schemes. They allow their customer to choose tenancy and loan amount they need. They also provide partial repayment of the gold loan. The minimum gold loan amount that a person can avail of is Rs.1500 and has no maximum limit. They also have a pre-payment option facility and no need to pay the penalty.

IIFL Finance:

IIFL provides gold loans to its borrower’s with an interest rate starting from 9.24% up to

24.00%. They offer loans against gold purity over 18K. It also provides a Bullet repayment mode, in which one can pay the amount of loan at the end of the tenancy. If a customer is closing its account before 3 months, a nominal amount of Rs.150 will be charged.

HDFC Bank:

HDFC has a scheme named “Sampoorna Bharosa Gold Loan,” which provides gold loans to its customers. It has processing charges of 1.5% plus GST charges with a 9.90% of interest rate. Women borrowers are provided with special interest rates. And if, in any case, the borrower closes its account, then nominal charges will apply of 2%+GST.


ICICI has an age limit for its borrowers. A person with the age group of 18-70 years can easily apply for a gold loan. The purity of gold should be above 18K. The processing fee is 1% on the loan amount, and the interest rate is 6% per annum if the customer pays it after the due date.

Canara Bank:

It has a “Swarna Loan Scheme” under which they provide a gold loan. The rate of interest may vary depending on the loan amount. If the loan amount is Rs.5 lakhs, then the customer will be charged 9.85% of the interest rate, and if the amount is above, it will be 9.95%. The customer needs to pay 1% of the loan amount to the bank.

The Last Words

Interest rates can influence your loan. For example, you take a gold loan from an NBFC such as IIFL finance that offers you an interest rate of 9.24%. You borrow rs.2 lakh for one year; then, according to that, you have to pay the interest cost of rs.10 151. But if it offers you an interest rate of 24%, then the interest cost will be more than double; it will be rs.26, 943.