Gold loans from leading gold loan companies is around 12 to 18 per cent, depending on the size of loan, the per cent tage of loan to value ration etc.
However, the government owned Indian Bank is offering gold loans under its Agricultural Jewel Loan at just 7 per cent per annum, which should help those farmers in dire need, during the Covid-19 pandemic.
So, if an individual avails a gold loan of Rs 1 lakh, it would cost an interest of just Rs 543 per month, which is the presently the cheapest considering the loan rates of other banks and gold loan companies.
"This interest rate is the least in the industry. Moreover the lending rate per gram is also high. We provide 80% of the jewel value as loan. Bumper Agri Jewel loan repayable in 6 months is also available at 7% fixed interest rates. Under this Bumper Agri Jewel loan 85% of the jewel value is given as loan," Indian Bank has stated.
The Bank is presently financing upto Rs 3745 per gram of gold.
Gold loans are cheap and interest rates are much lower as compared to personal loans. With interest rates having fallen dramatically and the Covid-19 pandemic, it makes sense to avail the cheaper gold loans.