A large number of banks offer gold loans, but it's important to keep in mind that a bank can only lend up to 75% of the LTV (loan to value) ratio of one's gold. That is if you are mortgaging gold worth Rs. 1 lakh in a bank, you can acquire a gold loan of up to Rs. 75,000 against your gold.
As a result, one must verify the amount of loan sanctioned and the LTC ratio of one's gold being mortgaged. Aside from that, different banks charge different interest rates on the gold loans they offer. As a result, this is a significant consideration when taking out a gold loan from a bank.
Here are 5 banks with the lowest gold loan interest rates:
State Bank of India (SBI): According to the SBI website, sbi.co.in, the interest rate on gold loans at SBI is 7.30 percent per year. An applicant can acquire a loan of up to Rs. 50 lakh for three years. SBI charges 0.50 percent of the loan amount + GST as a processing fee while processing a gold loan. SBI charges a minimum of Rs.500 in GST while processing gold loans.
Punjab National Bank (PNB): The public sector bank is giving a gold loan with an initial interest rate of 7%. PNB charges a maximum interest rate of 7.50 percent on gold loans.
Canara Bank: This state-owned bank offers a gold loan with a 7.35 percent interest rate. It charges a processing fee ranging from Rs.500 to Rs.5,000, depending on the size of the gold loan.
Punjab & Sind Bank: This bank provides gold loans with yearly interest rates ranging from 7% to 7.50%. This bank charges a minimum processing cost of Rs.500 and a maximum processing fee of Rs.10,000.
Union Bank: This state-owned bank offers a gold loan at a rate of 7.25 percent to 8.25 percent each year. The processing charge associated with processing a gold loan is not mentioned on the PSU bank's website.
