Home / Money / Personal Finance /  SBI vs PNB vs Canara Bank vs other banks: How much a gold loan will cost you

Gold loan interest rate: A god number of banks offer gold loan but while going for this form of mortgage finance, one must note that a bank can offer up to 75 per cent of LTV (loan to value) ratio of one's gold. Means, if you are mortgaging gold worth 1 lakh in bank, then you can get up to 75,000 gold loan against your gold. So, one must ensure that how much loan is getting sanctioned and what is the LTC ratio of one's gold getting mortgaged. Apart from this, different banks levy different interest rate on their offered gold loan. So, this is an important factor while opting gold loan from a bank.

Here we list out 5 banks that offer cheapest gold loan interest rate:

1] State Bank of India (SBI): As per the SBI website — sbi.co.in, gold loan interest rate at SBI is 7.30 per cent per annum. An applicant can get up to 50 lakh loan for a tenure of 3 years. While processing one's gold loan, SBI charges 0.50 per cent processing fee of the loan amount plus GST. The minimum GST that SBI charges while processing gold loan is 500.

2] Punjab National Bank or PNB: The PSU bank is offering gold loan at starting interest rate of 7 per cent. The maximum gold loan interest rate levied by PNB is 7.50 per cent.

3] Canara Bank: This state-owned bank is offering gold loan at an interest rate of 7.35 per cent. It levies a processing fee from 500 to 5000, depending upon the gold loan amount.

4] Punjab & Sind Bank: This bank is offering gold loan at an annual interest rate ranging from 7 per cent to 7.50 per cent. Minimum processing fee charged here is 500 while maximum processing fee charged by this bank is 10,000.

5] Union Bank: This state-owned bank is offering gold loan at an annual interest rate of 7.25 per cent to 8.25 per cent. The PSU bank website is silent on processing fee involved while processing one's gold loan.

6] Bank of Maharashtra: This bank is offering gold loan at an attractive annual interest rate of 7 per cent. It charges processing fee from 500 to 2000 along with GST.

So, gold loan interest rate levied by the Bank of Maharashtra is cheapest among the major banks in India and it is charging a reasonable processing fee as well. However, gold loan interest rate at SBI, PNB and Canara Bank is also reasonable but their processing fee makes them slightly dearer than the Bank of Maharashtra.

ABOUT THE AUTHOR

Asit Manohar

Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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