Planning to take gold loans? Check the interest rate by banks and documents required

Gold has been a very expensive and popular metal for households in India and people prefer buying gold ornaments for marriage purposes or for gifting on several occasions. 

Now to buy gold, people often choose to obtain loans from banks and it is considered to be one of the popular forms of getting loans and even reverse things also happens as loans can be availed against gold in case of emergencies.

What is a gold loan?

A gold loan is basically when a person takes loans against gold (within a range of 18-24 carats) from a lender. It is also important to note that the loan amount given to a person is a certain percentage of the gold which is based on the current market value and quality of the yellow metal.

Many banks give gold loans for a maximum loan to value ratio of 75 percent of the current market price of the gold.

Gold loan benefits include getting loans at lower interest rates, quick and hassle-free loan disbursal, flexibility of use, among others.

The documents needed to get gold loans vary from lender to lender. Some of the common documents required include identity proof of the borrower like the Aadhaar Card, PAN, Voter ID, etc., photographs, address proof, among others.

Gold loan interest rate:

The interest rates vary from banks to banks. Check the list below to know the current rate offered by some of the banks in the country:
1. State Bank of India: 7.50 percent
2. Bank of India: 7.35 percent
3. Punjab National Bank: 8.75 percent
4. Union Bank: 8.20 percent
5. Axis Bank: 12.50 percent