Gold Loan Interest Rate: If you want to withdraw money from your gold instead of selling it, a gold loan is a good option. Currently, public sector banks like Central Bank of India, PNB, and SBI offer the lowest interest rates for gold loans.
Gold Loan Interest Rate: If you want to withdraw money from your gold instead of selling it, a gold loan is a good option. Currently, public sector banks like the Central Bank of India, PNB, and SBI offer gold loans at the lowest interest rates. Demand for gold loans in India has reached a record high in 2025, with growth in gold reaching ₹2.94 lakh crore (approximately $1.2 trillion) in 2025, with a 122% year-over-year growth rate. This increase is largely due to rising gold prices. People are now able to earn more money by pledging gold due to the lower prices.
Why is the Demand for Gold Loans Growing?
Gold loans don’t require people to sell their gold and provide instant access to a loan. These loans are typically used for emergency expenses, business needs, weddings, or education. Since these loans are collateralized by your gold, the risk for banks is lower. Interest rates are also lower than personal loans.
Why is gold rising?
Gold has delivered impressive returns to investors in 2025, with a 44% increase so far this year. According to a Tata Mutual Fund report, central banks worldwide have nearly doubled their gold purchases in the past 10 years. The US Federal Reserve (USFED) cut rates by 25 basis points (0.25%) on September 17, leading to a surge in gold prices. Growing global uncertainty and fears of an economic recession have led investors to increase their investments in gold, a safe asset. The weakening rupee has also further boosted gold returns for Indian investors. These factors have led to a sharp increase in demand for gold loans, as people are able to secure higher loans against the increased value of gold.
Gold Loan Interest Rates and Top 5 Banks
If you’re considering a gold loan in 2025, it’s important to know which banks offer the lowest interest rates.
First, the Central Bank of India offers the lowest interest rates on gold loans. The interest rate here ranges from 8.05% to 8.35% per annum. The loan tenure is up to 12 months, and the bank charges a processing fee of 0.25% plus GST. You can avail loans from here ranging from ₹10,000 to ₹40 lakh.
Indian Overseas Bank (IOB) is at second place. The interest rate here ranges from 8.20% to 11.60%. The loan tenure is up to 12 months, and the processing fee is determined by the loan amount. You can avail gold loans from ₹25,000 to ₹50 lakh.
Punjab National Bank (PNB) is in third place. Interest rates here start at 8.35%, and loan tenures last up to 12 months. The bank charges a processing fee (plus GST) of 0.30% of the loan amount. You can avail loans from this bank ranging from ₹25,000 to ₹25 lakh.
Bank of India (BOI) comes in fourth. This bank charges an interest rate of 8.60% to 8.75% on gold loans. The loan tenure is up to 12 months, and the processing fee is a maximum of ₹1,500. The bank offers loans ranging from ₹20,000 to ₹30 lakh.
State Bank of India (SBI), the country’s largest bank, is in fifth place. Interest rates at SBI start at 8.75%. Loan tenures can be up to 36 months, or 3 years. This means that it offers a longer tenure option compared to other banks. The processing fee is 0.25% of the loan amount and you can avail a loan ranging from Rs 20,000 to Rs 50 lakh.
