Gold loans have been the most common loan availed by people in the year 2020. Considering how the pandemic resulted in many people losing their jobs or not earning enough money, they have been depending on gold loans to fulfill certain functions that they cannot afford. A gold loan requires one to only produce the already existing gold to the bank, which will be checked by the bank, before providing the loan. The amount given by the bank has to be repaid to get the gold back, In the wake of this, it is important to learn which banks provide the lowest interest rates and EMIs.
The cheapest interest rate for a gold loan is offered by Punjab and Sind Bank currently. It charges only 7 percent of interest per annum for Rs. 5 Lakh. They also provide a valuable tenure of three years. The second bank providing a very low-interest rate is the Bank of India which offers an interest rate of 7.35 percent. The State Bank Of India which is one of the largest government handled bank in India, provides a rate of 7.5 percent per annum.
There are many non-banking financial companies as well, such as Muthoot Finance that specialize in providing gold loans and do so at a very cheap interest rate. IIFL Finance provides the cheapest interest rate, among all the other non-banking financial companies. It gives a rate as low as 9.24 percent. They are followed by Bajaj Finserv, which gives an 11 percent interest rate, and Muthoot Finance that allows an 11.9 percent interest rate. Manapurram Gold Loan gives a rate of 12 % to its customers.
The EMI is calculated based on the respective interest rates provided by these banks as NBFCs. These low-interest rates have helped people, especially during the pandemic to fulfill certain necessary jobs.