Gold Loan Interest Rates 2025: Lowest Gold Loan Interest Rate in India

A gold loan is a secured loan where you pledge gold jewellery or coins to access funds for personal or business needs. In 2025, gold loan interest rates in India range from 7.75% to 29% p.a., depending on the lender, loan amount, gold purity, tenure, and whether you choose a bank or NBFC. Public sector banks like Bank of Baroda (7.75%) and Central Bank of India offer the lowest rates. Private banks such as HDFC and ICICI provide flexible tenure and high loan amounts at moderate rates. NBFCs like Muthoot Finance, Manappuram, and IIFL offer fast disbursal and higher LTVs, but often charge up to 27–29% for short-term loans.

In this guide, you’ll find the latest gold loan interest rates for 2025, along with eligibility, documentation, repayment options, and a comparison of top banks and NBFCs.

What Is the Gold Loan Interest Rate? 

A gold loan interest rate is the percentage charged by banks or financial institutions against the loan amount provided when borrowers pledge gold as collateral. In India, gold loan interest rates generally vary between 8% and 26% per annum. Borrowers can repay the interest either in monthly instalments or as a lump sum based on the lender's terms.

Highlights of 2025 Gold Loan Interest Rates

The table below compares the gold loan interest rates, loan tenures, and processing fees offered by top banks and financial institutions in India for 2025:

Features of Gold Loan

Gold loans offer a convenient and secured borrowing option for individuals who need quick access to funds by pledging gold assets. :

• Secured loan using gold jewellery or coins as collateral
• Quick disbursal and minimal documentation
• Short repayment tenures ranging from 3 months to 3 years
• Interest payment options include emi, bullet repayment or partial prepayment
• No impact of credit score on loan approval but may affect interest rate
• Lower interest rate compared to personal loan
• Pledged gold is returned on successful repayment

Eligibility for Gold Loan

The eligibility criteria set for a gold loan can vary from one lender to another. Therefore, it is advisable to check such criteria outlined on the lender's website before initiating the application for a gold loan.

Here are some eligibility criteria commonly set by most lenders in India for gold loans: 

• An applicant should be 18 years of age or above.
• He/she must pledge gold ornaments or articles as security against the loan. 
• The applicant should pledge gold of 18 carats or above as security. 

Documents Required to Apply for Gold Loan

The list of documents required at the time of applying for a gold loan varies, depending upon the lender’s terms and conditions. Take a look at the following documents that are generally needed for a gold loan: 

• Duly filled and signed gold loan application form.
• Latest passport-size photographs of the applicant.
• PAN card or Form 60.
• Proof of Identity (Aadhaar card, Voter ID card, driving license, etc).
• Proof of Address (Passport, utility bills, rental agreement, etc).
• Age Proof (Birth certificate or school passing certificate).
• Signature proof.
• Other post-loan disbursement documents (if required).

Gold Loan Processing Fee and Loan Appraiser Charges

Take a look at the following table to find out the applicable processing fees and loan appraiser charges of different leading banks in India:

Factors Influencing Gold Loan Interest Rates

Here are some of the factors that influence the interest rates for gold loans offered by prominent banks and financial institutions in India.

• Monthly Income 
  While processing a gold loan request, the lender takes into account the applicant's monthly income. When you earn a stable income, the bank or financial institution becomes more assured of your capacity to repay the loan. This subsequently leads to a lower interest rate charged against your gold loan.
   
• Gold Market Rate 
  As per the Reserve Bank of India, the Loan to Value (LTV) ratio for gold loans is 75%. This ratio denotes the maximum loan amount that banks can provide based on the value of the pledged gold. If the current gold market rate is high, the value of the articles you pledge against your gold loan will also be high. In this case, lenders offer lower interest rates since less risk will be involved. 
   
• Principal Loan Amount 
  The amount of loan you request from a lender determines the rate of interest against which your gold loan will be charged. You will be liable to pay higher interest if you want to avail a higher loan amount. Therefore, all borrowers need to assess their loan requirements before applying for a gold loan. 
   
• External Benchmark Lending Rates 
  All gold loans facilitated by Indian banks are linked with an external benchmark, be it the RBI repo rate or the 10-year government bond rate. The interest rates on gold loans are subject to change when the Reserve Bank of India or the Government of India adjusts its policy rates. If there is an increase in the policy rates, the gold interest rate will also increase. 
   
• Credit Score 
  As an eligibility criterion, a lender in India considers your creditworthiness, defined by the CIBIL score, while sanctioning a gold loan. A borrower with a good credit score is more likely to qualify for lower interest rates. A good credit score, representing a good repayment history, assures a lender that you will repay the loan amount without any hassle. 

Gold Loan Interest Rate Provided by Top Banks in India 2025 

Here is a table highlighting the rate of interest charged against the gold loan provided by top banks in India, along with the loan amount and tenure:

Comparison of Gold Loan Interest Rates Provided by Top Non-Banking Institutions in India

Given below is a comparative outline of varying gold loan interest rates provided by different financial institutions in India other than leading banks: 

Best Gold Loan Interest Rate

The best bank for a gold loan varies for different individuals, depending on their financial requirements and preferences. Take a look at the following table to find out why the gold loan interest rate offered by some leading Indian banks is considered the best:

Gold Loan Interest Rate Calculator

A gold loan calculator is a financial tool readily accessible online that computes the approximate value of the loan amount you can avail. It can also determine the amount of interest you will be liable to pay against a gold loan, along with the monthly EMI amount. This tool proves to be valuable for borrowers planning to apply for a gold loan, offering them an estimate of their repayment liability.

How to Calculate Gold Loan Interest Rate?

The interest amount payable on a gold loan, as determined by the interest rate, can also be calculated using a mathematical formula. Let us now discuss this formula with the help of an example. 

P x R x (1+R)^N / [(1+R)^N-1]

Where,

P = Principal amount
R = Rate of Interest (annual)
N = Loan tenure (in months)

Suppose you want to avail a gold loan of Rs. 1 lakh from a leading bank in India, charging 7.2% interest for 3 years. 

By incorporating the values into the formula, you will find that 

The amount payable = 1,00,000 * 0.006 * (1 + 0.006)36 / ((1 + 0.006)36 – 1) 

= Rs. 1,11,487

Gold Loan Maximum and Minimum Limit

Here is a detailed overview of the maximum and minimum limit of loan amounts you can sanction from the leading Indian banks and financial institutions:

How to Apply for a Gold Loan? 

You can easily apply for a gold loan, either through online or offline mode. However, before proceeding with the application process, it is in your best interest to seek out lenders offering low-interest rates and flexible terms and conditions. Moreover, you must also check the eligibility criteria and documentation requirements before applying. 

Following this, you can move forward with the application process as outlined below:

Online 

The following is a step-by-step guide on how to apply for a gold loan online. 

Step 1: Visit the official website of your desired lender. 

Step 2: Navigate to the ‘Gold Loan’ section under ‘Loan Products’. 

Step 3: Look for the ‘Apply Now’ tab on the ‘Gold Loan’ page and click on it. You will be redirected to a new page displaying an application form. 

Step 4: Fill it up carefully with all the required details. 

Step 5: Click on the ‘Submit’ tab after verifying. 

Offline 

In case your lender does not provide an online application facility, you will have to apply for a gold loan through the offline mode. Here is a stepwise process you need to follow with due diligence for doing so. 

Step 1: Visit the nearest branch of your preferred lender, along with the required documents. 

Step 2: Consult with a branch representative and obtain a gold loan application form. 

Step 3: Fill up the form with accurate details and attach the supporting documents with it. 

Step 4: Submit it to the branch representative. 

Once you go through the above-mentioned steps, your gold loan application request will be processed. Upon successful processing and verification, you will be sanctioned a gold loan. 

How to Close a Gold Loan? 

There are 4 ways of closing a gold loan. Let us discuss these methods in detail.

• By paying the interest amount as EMI and the principal amount 
  Under this method, borrowers are allowed to pay the amount of interest in small instalments or EMIs throughout the loan tenure. On the other hand, the principal loan amount is payable at the end of the tenure in a single lump sum payment.
• By paying regular EMIs
  This method involves repayment of both the principal loan amount and the amount of interest as EMIs throughout the tenure every month. It is an ideal way of repayment for salaried borrowers or individuals with a fixed monthly income. 
• By making bullet repayment 
  In this method, an individual is required to pay the entire principal amount along with interest in one lump sum at the end of the loan tenure instead of making small periodic payments. This method offers borrowers flexibility, especially those whose income varies throughout the year. 
• By making partial payments or foreclosure
  The partial payment method allows individuals to close their gold loan before the tenure by paying off the entire loan amount along with the interest. By doing so, you can significantly save on your interest payments. It is suitable for those financially secure individuals to repay their loan ahead of schedule and claim back the pledged gold articles. 

Although an attractive funding option, it is advisable for all borrowers to check for the lowest gold loan interest rate and flexible terms and conditions while considering loans against their gold articles. Moreover, it is equally important to consider one’s financial standing to repay the loan before prioritising an option. 

Other Banks Gold Loan Interest Rates:
1. ICICI Bank Gold Loan Interest Rate
2. Central Bank Gold Loan Interest Rate
3. Union Bank Gold Loan Interest Rate
4. Indian Overseas Bank (IOB) Gold Loan Interest Rate