Gold loans have become one of the most sought-after secured lending avenues in India, providing instant access to money by mortgaging gold ornaments. With an interest rate of 8.05% to 27% per annum in 2025, gold loans offer a lucrative alternative to unsecured personal loans for addressing immediate financial requirements. The reason behind the popularity of gold loans is their lesser documentation needs, quicker processing, and lower interest rates than other loans.
Top Banks for Gold Loan in India 2025 – Comparison Table
| Bank/NBFC | Interest Rate (% p.a.) | Loan Amount Range | Processing Fee | LTV Ratio |
|---|---|---|---|---|
| State Bank of India | 7.50% – 9.00% | ₹20,000 – ₹50 lakh | 0.50% + GST | Up to 75% |
| HDFC Bank | 8.50% – 17.45% | ₹10,000 onwards | 1% of disbursal amount | Up to 75% |
| ICICI Bank | 9.25% – 18.00% | ₹10,000 onwards | 2% of loan amount | Up to 75% |
| Axis Bank | 11.99% – 17.00% | ₹25,001 – ₹40 lakh | 0.5% + GST | Up to 75% |
| Kotak Mahindra Bank | 8.00% – 17.00% | ₹20,000 – ₹1.5 crore | Up to 2% + GST | Up to 75% |
| Bank of Baroda | 9.15% – 16.75% | Up to ₹50 lakh | Up to 2% of loan amount | Up to 75% |
| Canara Bank | 9.00% | ₹5,000 – ₹35 lakh | ₹500 – ₹5,000 | Up to 75% |
| Indian Bank | 8.80% – 9.00% | ₹1,000 onwards | 0.56% of sanctioned limit | Up to 75% |
| Central Bank of India | 8.40% – 9.50% | ₹1,000 onwards | 0.50% of loan amount | Up to 75% |
| Punjab National Bank | 12.25% | ₹25,000 – ₹25 lakh | 0.75% of loan amount | Up to 75% |
Leading NBFCs for Gold Loans
| NBFC | Interest Rate (% p.a.) | Loan Amount Range | Processing Fee | Special Features |
|---|---|---|---|---|
| Muthoot Finance | 10.50% – 22.00% | ₹1,500 onwards | 1% + applicable charges | Largest gold loan NBFC |
| Manappuram Finance | 9.90% – 26.00% | ₹10,000 onwards | As per company policy | Home service available |
| Bajaj Finance | 14.00% – 26.00% | ₹15,000 onwards | Minimal processing charges | Quick digital process |
| IIFL Finance | 12.00% – 14.00% | ₹10,000 onwards | 0.10% – 1% | Gold loan at home service |
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Complete Gold Loan Application Process
Online Application Process
Most major banks and NBFCs now offer streamlined online gold loan applications, making the process more convenient for borrowers.
Step 1: Research and Compare Lenders
Begin by researching different banks and NBFCs that offer gold loans, comparing their interest rates, processing fees, and loan-to-value ratios. Visit official websites of lenders like SBI, HDFC Bank, ICICI Bank, Axis Bank, and leading NBFCs to understand their offerings.
Step 2: Check Eligibility Criteria
Verify that you meet the basic eligibility requirements, including age (typically 21-70 years), Indian residency, and gold purity requirements (18-22 karat gold). Ensure your gold ornaments meet the minimum purity standards accepted by lenders.
Step 3: Online Application Submission
Visit the lender’s website and navigate to the gold loan section. Fill out the online application form with your personal details including full name, mobile number, address, and loan amount required. Submit the completed form after agreeing to terms and conditions.
Step 4: Document Upload
Upload required KYC documents including Aadhaar card, PAN card (for loans above ₹5 lakh), passport, voter ID, or driving license. Ensure all documents are clear and valid to avoid processing delays.
Step 5: Branch Visit for Gold Evaluation
Schedule an appointment at the nearest branch or opt for gold loan at-home service where available. Present your gold ornaments for professional evaluation by certified appraisers who will assess purity, weight, and current market value.
Step 6: Loan Amount Determination
Based on the gold evaluation, lenders will offer up to 75% of the gold’s current market value as per RBI guidelines. The final loan amount depends on gold purity, weight, and prevailing gold rates.
Step 7: Agreement Signing and Documentation
Review the loan agreement carefully, including interest rates, repayment terms, and foreclosure charges. Sign the loan agreement and obtain a pledge receipt for your gold ornaments.
Step 8: Loan Disbursal
Upon completion of all formalities, the approved loan amount is disbursed directly to your bank account within a few hours to one day. The entire process from application to disbursal typically takes 24-48 hours.
Offline Application Process
For offline applications, visit the nearest branch with your gold ornaments and required documents, complete the physical application form, undergo immediate gold evaluation, and complete the loan process with branch assistance.
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Gold Loan: Pros and Cons
Advantages
- Quick Processing and Approval: Gold loans offer same-day approval and disbursal, making them ideal for emergency financial needs. The entire process from application to fund disbursal typically takes only a few hours.
- Lower Interest Rates: Gold loan interest rates are significantly lower than unsecured loans, ranging from 8.05% to 18% for most banks in 2025. This makes them more affordable compared to personal loans or credit cards.
- Minimal Documentation: Unlike other loans, gold loans require only basic KYC documents such as Aadhaar card, voter ID, or passport. No income proof or employment verification is typically required.
- No Credit Score Dependency: Gold loans are approved regardless of credit score since the gold acts as collateral. This makes them accessible to individuals with poor or no credit history.
- Flexible Repayment Options: Most lenders offer multiple repayment schemes including monthly EMIs, bullet payments, or interest-only payments during the tenure. Prepayment is often allowed without penalties.
- High Loan-to-Value Ratio: Borrowers can access up to 75% of their gold’s current market value, providing substantial funding against their gold assets.
Disadvantages
- Risk of Gold Auction: If loan repayment defaults occur, lenders have the right to auction pledged gold to recover outstanding amounts. This poses a significant risk of losing valuable family ornaments.
- Limited Loan Tenure: Most gold loans have shorter repayment periods, typically ranging from 6-12 months, which may result in higher monthly payments.
- Gold Price Volatility: Fluctuating gold prices can affect loan values and may require additional collateral if prices drop significantly during the loan tenure.
- Storage and Insurance Concerns: While lenders provide secure storage, borrowers lose physical possession of their gold ornaments throughout the loan period.
- Processing and Additional Charges: Despite competitive interest rates, gold loans may involve processing fees, valuation charges, and documentation fees that add to the overall cost.
Key Features Comparison
- Fastest Processing: SBI, HDFC Bank, and ICICI Bank offer same-day processing with digital documentation.
- Lowest Interest Rates: State Bank of India offers the most competitive rates starting from 7.50% per annum, while Indian Bank and Central Bank of India also provide attractive rates below 9%.
- Highest Loan Amounts: Kotak Mahindra Bank offers gold loans up to ₹1.5 crore, making it suitable for high-value requirements.
- Best for Small Loans: Indian Bank and Central Bank of India accept gold loans from as low as ₹1,000, catering to small-scale borrowers.
- No Processing Fees: Several banks like SBI and Canara Bank offer gold loans with minimal or no processing fees, reducing overall borrowing costs.
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Conclusion
Gold loans remain as one of the most inexpensive and easily accessible forms of borrowings in India for 2025 with competitive interest rates as low as 7.50% per annum. As new RBI guidelines guarantee consistent LTV ratios of 75% between all lenders, borrowers now get more protection and transparency.
State Bank of India stands as the best among borrowers in terms of lowest interest rates, while HDFC Bank and ICICI Bank both lead when it comes to speed of processing and customer care. If NBFCs are preferred, Muthoot Finance and Manappuram Finance provide widespread branch networks as well as flexible service options such as home-based gold assessment.
While choosing a gold loan provider, look beyond interest rates at the processing fee, flexibility in loan tenure, foreclosure fees, and the quality of customer service. The online processing of gold loans has simplified applications, but physical gold appraisal is still required for valuation and approval of the loan.
With apt planning and comparison shopping, gold loans are capable of arranging quick access to funds with affordable borrowing costs, making them a great option for emergency funds or well-planned financial needs in 2025.
