Gold Loan Interest Rates Compared: Banks vs NBFCs in 2026
Sep 29, 2026 | 4 mins read
Welcome!
neha chavan
Welcome!
neha chavan
Unlock the value of your gold jewellery without selling it. At L&T Finance, you can avail a Gold Loan starting from ₹5,000 at interest rates starting from 11.75% p.a., subject to the applicable loan scheme and eligibility. With quick processing, minimal documentation, flexible repayment options, and secure storage of your pledged gold, a Gold Loan can help you meet personal or business financial needs with ease.
The cost of a Gold Loan includes the applicable interest rate and other charges associated with processing and servicing the loan. While the exact rate offered depends on factors such as the loan scheme and loan amount, L&T Finance strives to offer competitive pricing with transparent charges.
| Particular | Details |
|---|---|
| Interest Rate | Starting from 11.75% p.a.* |
| Processing Fee | Up to 0.50% of the loan amount + applicable taxes |
| Loan Amount | ₹5,000 |
| Late Payment Charges | Applicable as per the loan agreement |
| Other Charges | Storage, SMS, legal, and other applicable charges as per the Schedule of Charges |
Before applying, it is advisable to review the applicable fees and charges to understand the total borrowing cost.
The amount you can borrow and the repayment period depend primarily on the value of your pledged gold and the loan scheme you choose.
L&T Finance offers Gold Loans ranging from ₹5,000, making them suitable for a variety of financial needs, including:
The final sanctioned amount is determined after evaluating the purity, weight, and market value of the pledged gold while complying with applicable regulatory guidelines.
Gold Loans from L&T Finance are generally available with a tenure of up to 12 months. Multiple repayment options may be available depending on the selected scheme, allowing borrowers to choose a repayment structure that aligns with their cash flow.
Several factors influence the interest rate offered on a Gold Loan.
The Loan-to-Value (LTV) ratio refers to the percentage of your gold's assessed value that can be borrowed as a loan.
A higher LTV generally means you're borrowing a larger proportion of your gold's value. We determine the applicable LTV in accordance with RBI guidelines and our internal lending policies.
Gold jewellery with higher purity typically has a higher assessed value. Since the loan amount is based on the value of the pledged gold, jewellery with higher purity and greater weight may qualify for a higher loan amount.
L&T Finance generally accepts eligible gold jewellery with a purity ranging from 18 to 24 karats.
The repayment period can also influence the applicable interest rate or loan scheme. Choosing a tenure that matches your repayment capacity can help you manage borrowing costs more effectively.
Gold Loans are commonly offered at fixed interest rates, allowing borrowers to know their repayment obligations throughout the loan tenure. However, the applicable interest structure depends on the selected loan scheme and prevailing lending policies. Always review your sanction letter to understand the applicable rate type.
Knowing how interest is calculated helps you estimate the total repayment amount before borrowing.
A simple formula is:
Interest = Principal x Interest Rate x Time
For example:
Estimated Interest = ₹2,00,000 x 12% x 1 = ₹24,000
Your actual repayment may vary depending on the repayment method, applicable charges, and the chosen loan scheme. Always refer to your loan agreement for the exact repayment schedule.
Gold purity plays an important role in determining your eligible loan amount.
When you pledge hallmarked jewellery, the purity assessment is generally more straightforward. Since the market value of higher-purity gold is greater, it can support a higher eligible loan amount.
While purity influences the loan amount, the applicable interest rate is determined by our policies, the selected loan scheme, and other eligibility parameters.
The Bureau of Indian Standards (BIS) hallmark certifies the purity of gold jewellery.
A BIS hallmark typically indicates:
Although non-hallmarked jewellery may also be evaluated, hallmarked jewellery generally makes the valuation process simpler and more transparent.
Myth 1: Gold Loans always have very high interest rates.
Fact: Since Gold Loans are secured by collateral, they often carry lower interest rates than many unsecured borrowing options.
Myth 2: Your CIBIL score decides your Gold Loan interest rate.
Fact: Gold Loans are primarily secured against pledged gold. While we may review your profile, the loan is largely based on the value of the pledged jewellery.
Myth 3: Higher gold prices automatically reduce interest rates.
Fact: Gold prices affect your eligible loan amount rather than the applicable interest rate.
Myth 4: Hallmarked jewellery guarantees a lower interest rate.
Fact: Hallmarking supports accurate valuation but does not automatically guarantee a lower rate of interest.
Applying for a Gold Loan with L&T Finance involves minimal documentation.
Applicants should generally:
Keep the following documents ready:
The pledged gold is evaluated at the branch before determining the eligible loan amount.
