In 2025, gold loans continue to be one of the fastest and most convenient ways to raise funds in India. Whether it’s for medical emergencies, education expenses, or small business needs, people across all income groups prefer gold loans because of their easy approval and minimum documentation. However, before taking a gold loan, understanding gold loan interest rates is very important. These rates directly impact how much you’ll repay.
In this article, we explain everything you need to know about loan interest rates—what they are, how they work, and how to choose the best deal for yourself.
What Are Gold Loan Interest Rates?
Gold loan interest rates refer to the cost a bank or financial institution charges you for lending money against your gold ornaments or coins. These rates are usually charged annually and can either be fixed or floating.
When gold loan interest rates are high, your total repayment increases. On the other hand, lower rates help you save on interest costs, making your repayment burden lighter.
🏅 Gold Loan Interest Rates: Bank Comparison (2025)
| Bank | Rate Range | Fixed / Floating | CIBIL Impact | Women / Special Concession | Products & Loan Amounts |
|---|---|---|---|---|---|
| State Bank of India | 9.00% – 10.25% p.a. | Floating (MCLR‑linked) | ≤ MCLR+spread | Agriculture crop & women farmers: ~1–2% concession | Personal Gold Loan (EMI: ≤₹50 L), 3/6/12‑month bullet schemes; max 36 months |
| HDFC Bank | 9.30% – 17.86% p.a. | Floating | Based on LTV & customer tie-up | Lower rates for higher LTV & good relationships; no direct women concession noted | HDFC Jewel Loan: EMI, bullet, OD options; ₹25K–₹50 L; tenure 3–24 months |
| Axis Bank | ~17% p.a. onwards | Fixed | — | None specified | Gold Loan: ₹25 K–₹4 L etc.; processing fee + GST |
| Canara Bank | 8.75% p.a. onwards | Floating | — | None specified | Public‑sector gold loan up to ₹35 L; tenure 3 months & more |
| Bank of Baroda | 9.15% p.a. onwards | Floating | — | None specified | Gold loans up to ₹50 L; standard PSL & retail schemes |
| Kotak Mahindra Bank | ~0.88%/month → ~10.6% p.a. | Fixed | — | None specified | ₹20 K–₹1.5 Cr; LTV up to 75%; processing 1–2% + GST |
| PNB | 8.85% p.a. onwards | Floating | — | None specified | Loan up to ₹25 L; processing ~0.75% + GST |
| ICICI Bank | 9.25% – 18% p.a. | Floating | — | None noted | ₹20 K–₹20 L; 2% processing fee + GST |
| AU Small Finance | 9.50% – 24% p.a. | Floating | — | None specified | ₹1.5 K–₹1.5 Cr; tenure 3–48 months; processing 1% + GST |
🔍 Key Insights
- Most Competitive Rate:
- SBI offers the best starting rate at 9.00%, with up to 10.25% depending on scheme.
- Canara and PNB also provide lower-tier rates from 8.75% and 8.85% respectively .
- Rate Structures:
- Most are floating; only Kotak provides a fixed monthly-based rate (~10.6% p.a.) .
- HDFC’s rates vary widely based on LTV and customer relationship.
- Concessions:
- SBI offers 1–2% discounts for farmers (agriculture gold loans) and women borrowers.
- Farmers and women borrowers get special concessions under public sector schemes from SBI.
- Loan Features:
- Loan amounts range from ₹20 K to ₹1.5 Cr.
- Tenures vary between 3–36 months (SBI), 3–24 months (HDFC), and can extend to 48 months for some lenders.
- Offerings include EMI-based loans, bullet repayment, and overdraft (OD) options.
✅ How to Choose
| Need | Best Option |
|---|---|
| Lowest interest | SBI or Canara Bank |
| Fixed-rate preference | Kotak Mahindra |
| Flexible tenure & OD facility | HDFC |
| Farming/agri discount | SBI agriculture scheme |
| Large loan amount | Kotak (up to ₹1.5 Cr) |
Note: Actual rates may vary based on location, loan amount, and the type or quality of gold.
EMI Calculator
Types of Gold Loan Interest Rates
Interest rates are offered in two major ways:
1. Fixed Interest Rates
The rate stays constant throughout the loan tenure. Your EMI or bullet payment doesn’t change. It’s ideal for those who want predictable repayment.
2. Floating Interest Rates
This rate can change during the loan term depending on market conditions. It may offer savings when market rates fall but also carries the risk of increase.
Most borrowers prefer fixed interest rates for short tenures to keep things simple and safe.
Factors That Affect Gold Loan Interest Rates
Interest rates vary from lender to lender based on several factors:
✅ Loan Amount
Lenders sometimes offer lower interest rates for higher-value loans because they are backed by more gold.
✅ Loan-to-Value (LTV) Ratio
LTV ratio is the amount of loan you get as a percentage of your gold’s market value. Higher LTV loans may attract higher rates due to greater risk.
✅ Gold Quality and Purity
Gold with higher purity (22K or 24K) gets better rates, as lenders are assured of its resale value.
✅ Repayment Type
These loans can be repaid through EMIs, bullet repayment, or interest-only models. Interest rates vary based on the repayment method chosen.
✅ Lender Type
NBFCs may offer quicker processing but charge slightly higher interest rates than banks.
Popular Gold Loan Schemes
Here are a few types of gold loan schemes and how interest rates vary:
| Scheme Type | Interest Rate Range | Repayment Method | Ideal For |
|---|---|---|---|
| Regular Gold Loan | 9% – 12% | EMI or bullet | Salaried or self-employed |
| Interest-Only Loan | 10% – 13% | Monthly interest only | Traders, seasonal income earners |
| Bullet Repayment Loan | 11% – 15% | Lump sum at maturity | Short-term borrowers |
Understanding these schemes helps you pick the best loan plan with suitable interest rates.
How to Compare Gold Loan Interest Rates
Here are simple tips to compare and choose the best loan:
🔍 Check Multiple Offers
Do not settle for the first offer. Compare interest rates from both banks and NBFCs.
🔍 Use Loan Calculators
Use gold loan calculators online to see how interest rates affect total repayment.
🔍 Read Terms Carefully
Besides interest, look at processing fees, foreclosure charges, and penalties for delays.
🔍 Know Your Gold’s Worth
Understand how much loan your gold can fetch and how that affects your final interest.
EMI Calculation Example
Let’s understand how gold loan interest rates impact repayment. Suppose you take a ₹2,00,000 gold loan for 1 year. Here’s how different interest rates change the total cost:
| Interest Rate | Monthly EMI (12 months) | Total Interest Paid | Total Repayment |
|---|---|---|---|
| 9% | ₹17,483 | ₹9,796 | ₹2,09,796 |
| 12% | ₹17,799 | ₹13,588 | ₹2,13,588 |
| 15% | ₹18,117 | ₹17,404 | ₹2,17,404 |
As seen above, a 3% increase in lnterest rates can raise your total repayment by over ₹7,000 for just one year.
Secured Nature of Gold Loans
Gold loans are secured, meaning you pledge your gold as collateral. This reduces risk for the lender and keeps gold loan interest rates lower than unsecured loans like personal loans.
However, in case of default, the lender can auction your gold. So it’s vital to repay on time.
Tips to Get the Lowest Gold Loan Interest Rates
- Maintain a Good Relationship with your bank or financial provider.
- Borrow Only What You Need to keep interest low.
- Shorten Loan Tenure to reduce total interest paid.
- Avoid Frequent Defaults to prevent penalties and rate increases.
FAQs – Gold Loan Interest Rates
A. Gold loan rates now range from approximately 8.40% to 10.25% p.a. for banks, with NBFCs charging between 9.90% and 26% p.a.
A. Public sector banks like Central Bank of India (8.40%), Canara Bank (8.75%), PNB (8.85%), and SBI (9.00%) provide the most competitive rates.
A. Most gold loans use floating rates linked to benchmarks such as MCLR or RRLLR. Kotak Mahindra is an exception, offering a fixed rate (approx. 0.88% per month, or ~10.6% p.a.).
A. No, gold loans primarily depend on Loan-to-Value (LTV), tenure, and borrower segment; CIBIL score plays a minimal role. However, timely repayment can help improve your credit score.
A. Yes, SBI offers 1–2% concession for women farmers or those borrowing under agriculture-linked schemes.
A. Banks typically lend up to 75% LTV, although earlier RBI guidelines allowed up to 90%, and NBFCs may vary slightly.
A. Gold loan terms generally range from 3 months to 3 years, depending on the bank or NBFC.
A. Yes. A user noted that taking a secured gold loan and repaying it promptly helped improve their CIBIL from ~770 to ~795 within months.
A. Beyond interest, most lenders charge processing fees (0–2% of loan amount), plus GST. SBI, for example, charges 0.50% + GST.
A. Since these loans use floating benchmarks, when the RBI raises repo or RRLLR rates, bank gold loan rates typically increase accordingly. NBFCs might adjust rates based on internal policy.
Final Thoughts
Interest rates are an essential factor when you’re planning to borrow against your gold. In 2025, competitive rates and easy eligibility make gold loans a smart choice for short-term financial needs. Always compare rates, understand your repayment capacity, and read the terms carefully before signing.
By making a smart decision today, you can unlock the true value of your gold without financial strain.