Gold Loan Interest Rate: If you want to withdraw money from it instead of selling gold, Gold loan is a good option. Currently, government banks are giving gold loans at the lowest interest rates in Central Bank of India, PNB and SBI. The demand for gold loan in India has reached a record level in the year 2025. Its growth in the country has increased from 122 per cent year-on-year to Rs 2.94 lakh crore. This bounce is more due to rising gold prices. Now people are getting more money due to prices on mortgaging gold.
Why the demand for gold loan is increasing
In the gold loan, people do not need to sell their gold and get a loan immediately. This loan can usually take for emergency expenses, business needs, wedding or education expenses. Since this loan is given by mortgaging your gold, the risk for banks is low. Interest rates are also lower than personal loans.
Why is there a boom in gold
In the year 2025, gold has given great returns to investors. So far this year, an increase of up to 44 percent has been observed. According to the report of Tata Mutual Fund, in the last 10 years, central banks from all over the world have almost doubled buying gold. The US Federal Reserve (US FED) on September 17 cut a rate of 25 basis points (0.25%), leading to a rise in gold prices. Investors are increasing investment in safe assets ie gold due to increased global uncertainty and fear of economic recession. The weakness of the rupee has also further enhanced the returns on gold for Indian investors. Due to all these reasons, the demand for gold loan has increased rapidly because people are able to take more loans in exchange for increased gold value.
Interest rates and top 5 banks on gold loan
If you are thinking of taking a gold loan in the year 2025, then it is important to know which bank is giving loans at the lowest interest rate.
First, the Central Bank of India is paying the cheapest interest on Gold Loan. The interest rate here is between 8.05% to 8.35% per year. The loan period is up to a maximum of 12 months and the bank charges 0.25% processing fees as well as GST. You can take a loan ranging from Rs 10,000 to Rs 40 lakh from here.
The second number is the Indian Overseas Bank (IOB). The interest rate in this bank ranges from 8.20% to 11.60%. The loan period is up to 12 months and the processing fees are fixed according to the loan amount. Here you can take a gold loan ranging from Rs 25,000 to Rs 50 lakh.
The third place is Punjab National Bank (PNB). The interest rate here starts at 8.35% and the loan period lasts up to 12 months. The bank takes 0.30% processing charge (along with GST). In this bank, you can take a loan of 25,000 to 25 lakh rupees.
Bank of India (BOI) comes at number four. This bank charges 8.60% to 8.75% interest rate on gold loan. The loan period is up to 12 months and the processing fee is a maximum of Rs 1,500. The bank gives loans ranging from Rs 20,000 to Rs 30 lakh.
State Bank of India (SBI) is the country’s largest bank in fifth place. The interest rate in SBI starts at 8.75%. The loan period can be 36 months i.e. 3 years. That is, compared to the rest of the banks, there is an option of long period. The processing fees are 0.25% of the loan amount and you can take a loan of 20,000 to 50 lakh rupees.