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Gold loan interest rate: SBI Vs HDFC Vs Andhra Vs Manappuram Vs Muthoot; Best option for you

The Financial Express logo The Financial Express 08-04-2019 Priyadarshini Maji
While opting for a gold loan, borrowers should know how it works, its rates, charges, and similar other details. © Provided by IE Online Media Services Pvt Ltd While opting for a gold loan, borrowers should know how it works, its rates, charges, and similar other details.

India is known to be one of the largest markets for gold in the world. According to a report by the World Gold Council (WGC), growth in demand for gold in India and China outweighed weakness in the Middle East. India?s economy is also expected to grow by 7.5 per cent in 2018 and 2019, outpacing most global economies and showing resilience to geopolitical uncertainty. As per another report by the WGC, the annual demand for gold in India has increased by 304 per cent from 165 tonnes in 1987 to 666 tonnes in 2016.

The report further states: ?During 2017, the commitment from the Indian government to make hallmarking mandatory and garnered broader stakeholder support for a gold spot exchange, could have had a significant effect on local price discovery and the entire ecosystem around physical deliveries.?

The trend for this yellow metal only increases with time because not only as jewelry, gold is also used for commercial, industrial, and investment purposes. One can also easily get a loan at the time, in case of a financial emergency. Experts believe gold is the fastest way to get access to funds in dire situations. A low credit score does not stand as an obstacle while getting a gold loan. However, while opting for a gold loan, borrowers should know how it works, its interest rates, charges, and similar other details.

If you are also planning to take a gold loan, know which one suits you the best:

State Bank of India (SBI) Gold Loan

SBI offers gold loan at 10.55 per cent, both for its existing and new customers. The interest rate varies by the purity of gold, loan to value ratio, and the amount of loan. SBI charges a processing fee of 0.50 per cent of the loan amount or a minimum of Rs 500. The loan tenure ranges from 3 months to 36 months, and the amount of loan ranges from Rs 20,000 to Rs 20 lakh. SBI also allows prepayment of gold loans without any additional charges.

HDFC Bank Gold Loan

HDFC Bank gives you per gram estimate of the amount of loan you can get against your gold jewelry. The valuation is done on the basis of the purity of the gold, and price of the jewelry adjusted for the loan to value ratio. Currently, HDFC Bank is offering gold loan at Rs. 1,897 to Rs. 2,319 per gram. That, however, depends on the purity of the gold. The maximum price for gold loan rate per gram is for 22-carat jewelry calculated at a maximum LTV of 75 per cent. The maximum loan amount is Rs 50 lakh and the maximum loan tenure ranges up to 24 months.

Manappuram Gold Loan

Manappuram gold loan gives you per gram estimate of the amount of loan you can get against your gold jewelry. The valuation is done on the basis of the purity of gold, and price of the jewelry adjusted for the loan to value ratio. Currently, Manappuram is offering gold loan at Rs 1,897 to Rs 2,319 per gram. The maximum price for gold loan rate per gram is for 22-carat jewelry calculated at a maximum LTV of 75 per cent. The maximum loan tenure is 12 months, and the maximum loan amount is Rs 1 crore. For a 12-month gold loan an interest rate of 12 per cent is charged per annum.

Muthoot Gold Loan

Muthoot gold loan gives you per gram estimate of the amount of loan you can get against your gold jewelry. The valuation is done on the basis of the purity of the gold, and price of the jewelry adjusted for the loan to value ratio. Currently, Muthoot is offering gold loan at Rs 1,889 to Rs 2,309 per gram, the highest for 22-carat jewelry calculated at a maximum LTV of 75 per cent. The loan tenure ranges from 7 days to 36 months, and one can get a gold loan Rs 10,000 to Rs 2 crore. For a 36-month gold loan an interest rate of 12 per cent is charged per annum.

Andhra Bank Gold Loan

Andhra Bank offers one of lowest gold loan rate of 10.70 per cent. This rate is for both the existing bank customers and new borrowers. The loan interest rate, however, varies by the amount of loan, loan to value ratio, and purity of gold. Andhra Bank does not charge any processing fee or prepayment charges. The loan tenure ranges from 3 months to 12 months, and one can get a gold loan Rs 10,000 to Rs 2 crore.

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