State Bank of India (SBI) Gold Loan Interest Rate

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SBI Gold Loan Interest Rate	Details
Interest Rate	Starts at 7.50%
Processing Fee	0.25% on the loan value; minimum Rs. 250 + GST
Tenure	3 months to 36 months
Loan Amount	Rs. 20,000 to Rs. 50 lacs
Prepayment Fee	Nil
Gold Loan Scheme	EMI, Overdraft, and Bullet Repayment Scheme

State Bank of India (SBI) Gold loan Interest Rate is as low as 7.50%. The lowest EMI per Rs. 1 lakh is Rs. 3,111. You can apply for the loan against gold if over 18 years of age. The repayment schemes are flexible. Depending on the loan scheme, you can repay through monthly instalments, pay monthly interest on the amount drawn through overdraft, or pay monthly interest amount till end of tenure and then repay the entire principal borrowed amount. The interest rate starts at 7.30% for Realty Gold Loan, which is a scheme for only the SBI Housing Loan Customers.

In this post, we will discuss the State Bank of India gold loan interest rate, its features, interest rate calculation, other charges, gold loan rate per gram and factors which influence it, illustration of rate per gram, tips to get the best rate per gram, and FAQs.

Features of SBI Gold Loan Interest Rate

Below given are features of State Bank Gold Loan Interest Rate:

The bank charges a rate of interest 0.50% above the Marginal Cost of Funds-based Lending Rate (MCLR) for one-year on gold loans.
The lowest rate for personal gold loan and variants is 7.50%.
The minimum margin retained by the bank on liquid gold loan (overdraft) and personal gold loan is 25%. The same is 35% for bullet repayment scheme.
The processing fee is 0.25% of the gold loan amount subject to minimum fee Rs. 250 + GST on a loan against gold.
You need to pay only a minimum gold appraiser amount as decided by the bank.

Factors that Determine Gold Loan Interest Rates SBI

The lowest SBI gold loan rate of interest is 7.50%. Several factors influence the calculation of the interest rate. These factors are the loan amount, tenure, LTV, relationship with SBI, and others. Below given are factors that influence SBI interest rate for gold loan:

Factors Influencing SBI Gold Loan Interest Rates	Details
Loan Amount	The loan amount depends on the net weight of gold in the pledged asset. The bank offers a per gram gold rate as per the gold purity. A higher per gram rate is offered for higher purity. The loan against gold SBI amount is between Rs. 20,000 and Rs. 50 lacs. The bank may offer a lower interest rate for a higher amount.
Tenure	State Bank may charge a lower interest rate on loans of higher tenure. It may also charge a higher rate of interest for loans of shorter tenure. SBI gold loan comes with tenure 3 months to 36 months. A shorter tenure will reduce the total interest pay-out. Choose tenure for the loan as per your repayment capacity.
Purpose of the Loan	Almost every financial institution, including the State Bank of India offer gold loans for agricultural or farming activities. These loans come with concessional rates. Agriculture comes under priority sector lending target of the bank. For a gold loan for agricultural purpose, discount of 1% to 2% is applicable on the standard rate of interest.
Loan to Value Ratio	The maximum LTV is 75% for a loan against gold. SBI offers up to 65% LTV for bullet repayment scheme. On the other hand, LTV of up to 75% is available for liquid gold loan and personal gold loan scheme. LTV depends on the purity and net weight of the gold in the jewellery. Interest rate is lower for lower LTVs, and vice-versa.
Relationship with the Bank	The bank may offer concessional or lower interest rate for regular or existing customers. These customers should have a proven track record with the bank about payments on time in the past.

SBI Gold Loan Fees and Charges

Apart from the interest rate, the bank may apply other fees and charges on a loan against gold. These charges include:

Processing Fees: The minimum fee is Rs. 250. The applicable fee otherwise is 0.25% of the loan amount. The processing fee is a one-time and non-refundable fee. If you cancel the loan, you will not get back this amount. The processing charges include that for legal process, verification, documents check, and other procedures.
Prepayment and Foreclosure Charges: There are no charges for prepayment and foreclosure. So, you can prepay the loan amount or close the loan early as per your convenience, with no worries about penalty charges. You can save a good amount of the interest pay-out by choosing to prepay or foreclose the gold loan.

SBI Gold Loan EMI Calculation

At 7.50%, the gold loan SBI EMI calculation across different tenures and loan amounts is as follows:

SBI Gold Loan Monthly Instalment
Loan Amount	3 Years	2 Years	1 Year
Rs. 1 lakh	Rs. 3,111	Rs. 4,500	Rs. 8,676
Rs. 2 lakhs	Rs. 6,221	Rs. 9,000	Rs. 17,351
Rs. 2.50 lakhs	Rs. 7,777	Rs. 11,250	Rs. 21,689
Rs. 3 lakhs	Rs. 9,332	Rs. 13,500	Rs. 26,027
Rs. 4 lakhs	Rs. 12,442	Rs. 18,000	Rs. 34,703
Rs. 5 lakhs	Rs. 15,553	Rs. 22,500	Rs. 43,379
Rs. 7 lakhs	Rs. 21,774	Rs. 31,500	Rs. 60,730
Rs. 8 lakhs	Rs. 24,885	Rs. 36,000	Rs. 69,406
Rs. 10 lakhs	Rs. 31,106	Rs. 45,000	Rs. 86,757

SBI Gold Loan Rate Per Gram

The SBI gold loan per gram is the best in the market. It is based on the purity of the gold and the gold price as per the loan to value ratio (LTV) The price per gram offered by the bank is between Rs. 2,729 to Rs. 3,336. However, the rate shall change as per the bank’s discretion. The highest loan rate per gram for 22 carat jewellery as per 75% LTV is Rs. 3,336. The same shall fluctuate as per the gold price on the current day.

Estimate of SBI Gold Loan Value

Below listed are the factors that influence the SBI gold loan amount:

Factors that Influence SBI Gold Loan Value	Details
Net Weight and Purity of Gold	Every financial institution has an in-house valuer to estimate the net weight and purity of the gold content in a pledged asset. The expected gold purity is 18 carats to 24 carats. The bank will subtract the weight of stones, gems, or other precious materials other than gold in the jewellery and then calculate the actual weight of gold in the jewellery. The net weight and purity of gold details are provided in a formal letter issued by the in-house valuer.
Gold Price	After estimating the net weight and purity of gold in the pledged asset, the bank multiplies these details to the current gold price. The results tell you the gold value. As per the guidelines of RBI, the last 30 days average price for 22 carats gold is adjusted for estimating the gold purity. Thus, the State Bank applies the 30 days average multiplied by a factor of 20/22 carat to understand the gold’s value.
LTV or Loan to Value Ratio	SBI offers a maximum loan to value ratio up to 75%. Thus, the bank retains a minimum margin of 25% when disbursing a loan against gold. Depending on the gold loan scheme, loan amount, tenure, purity and net weight of the gold, the bank will determine the LTV and applicable interest rate. Usually, if you need a higher loan amount than what you are eligible for, a higher margin is retained by the SBI.

Per Gram Rate Based on Gold Purity

Based on LTV 65% to 75%, the State Bank of India provides the following lowest and the best gold loan rate per gram. The results are based on the average of the last 30 days.

For 18 carat jewellery, the rate per gram is Rs. 2,365 to Rs. 2,729.
For 20 carats, the same is between Rs. 2,628 and Rs. 3,336.
For 22 carats jewellery, the rate is Rs. 2,891 to Rs. 3,336.

Illustration

Consider Anil, Vinod, and Dinesh visit the State Bank of India branch with jewellery to avail a gold loan. All the three individuals have varying net weight gold or different purity levels. Below, we have discussed the gold loan eligible amount based on LTV 75%, the gold purity and net weight.

Purity of Gold in Carats	Gold Net Weight	Eligible Loan Amount
Anil has 22 carats of gold	50 grams	Rs. 2.29 Lakhs
Vinod has 20 carats of gold	60 grams	Rs. 2.50 Lakhs
Dinesh has 18 carats of gold	70 grams	Rs. 2.62 Lakhs

How to Get the Ideal Gold Loan Amount as Per Gram Rate?

State Bank of India accepts non-hallmarked as well as hallmarked gold jewellery for the loan. But, the highest per gram rate is reserved for hallmark jewellery. This reduces the chances of under-valuation, if any. A lower processing fee is also applicable for hallmarked ornaments. Below given are tips to avail the best loan against gold amount per gram:

The price of gold is as per 22 carats gold purity. But if the gold is of a lesser carat value, then the rate is adjusted to fetch a suitable gold loan amount.
As the rate per gram is for the gold content only, you must choose jewellery that has maximum gold in it. The jewellery with higher gold content will fetch you the highest loan amount. The weight of stones and gems is reduced to calculate the gold’s net weight.
The bank does not accept diamond ornament, if the gold purity it less than 18 carats. To get the best rate per gram, ensure that the gold purity is as per the expectation of the bank.
You must also negotiate for the highest LTV in order to secure the best loan amount. The maximum loan to value ratio is 75% as per the RBI’s guidelines.

Frequently Asked Questions about SBI Gold Loan Interest Rate

Below mentioned are FAQs on gold loan SBI interest rate:

How much is the starting SBI personal gold loan interest rate?

The starting rate of interest is 7.50% for personal gold loan SBI. The applicable interest rate will depend on the gold purity and weight. Other factors which may influence the rate of interest are loan amount and tenure, along with the repayment capacity of the borrower.
How much is the starting rate of interest for SBI multipurpose gold loan?

The starting interest rate is 7.50% for multipurpose gold loan SBI. The rate of interest depends on the gold net weight and purity. The type of gold and repayment capacity of the borrower will be considered to determine other factors such as the loan amount and tenure.
How much concession is provided for SBI agricultural gold loan?

If you take agricultural gold loan from State Bank, then you can expect a concession of 1% to 2% on the standard rate of interest. You need to provide proof of land and farming activity to the bank. The LTV for such type of loan could be different than that applicable on other SBI gold loan schemes.
Do existing borrowers get a discount on the SBI loan against gold interest rate?

Yes, the bank offers discount on standard interest rate to regular or existing customers. However, to get a concession on the loan against gold rate of interest, the customer should have a history of consistent repayments with the bank. The borrower should have a proven track record on a previous loan with SBI.
How to get the best interest rate for State Bank of India gold loan?
To get the lowest possible rate of interest on State Bank gold loan, follow the below mentioned tips:
- You should meet all the eligibility criteria for loan against gold.
- The jewellery that you pledge should have high gold content.
- The gold purity should be between 18 carats and 22 carats, the higher the better.
- You should have a great repayment capacity to negotiate for a lower rate of interest