Gold Loan Interest Rates Oct 2026: Which Bank Is Best?

Gold Loan Interest Rates in October 2026: Why the Bank You Choose Matters

A gold loan is one of the quickest ways to raise money against jewellery you already own, but the cost can differ a lot from one bank to another. Rates, processing fees and loan terms vary by lender and scheme. Before you pledge your gold, it pays to compare.

This guide compares gold loan interest rates and processing fees at leading banks in October 2026, explains why they differ and shows you how to pick the lender that suits your needs.

Gold Loan Interest Rates at a Glance (Indicative, as on October 1, 2026)

Bank	Interest Rate (p.a.)	Processing Fee
HDFC Bank	9.01% to 19.08%	Up to 1%
ICICI Bank	9.00% to 16.00%	Up to 2%
SBI	9.15% onwards	0.25% to 0.30%, depending on loan amount
Axis Bank	9.75% to 17%	Up to 1.5%
Kotak Mahindra Bank	9% to 20%	Up to 2%
Punjab National Bank	8.50% to 9%	Up to 0.30%
Bank of Baroda	8.90% to 9.00%	Nil up to Rs 3 lakh; 0.50% above

These are indicative rates, not guaranteed offers. GST and other charges are extra, and the rate you get can depend on the scheme, loan amount and tenure. Always confirm the latest rate and fees with the lender before you apply.

Which Bank Offers the Best Gold Loan Deal?

There is no single best lender for everyone. The right choice depends on how much you need, how long you will borrow and how quickly you need the money.

Lowest Starting Rates: PNB and Bank of Baroda

In the comparison above, Punjab National Bank (8.50% to 9%) and Bank of Baroda (8.90% to 9.00%) show the lowest and narrowest rate ranges. Both also keep processing fees low, which makes them worth a look if you want to hold down the total cost.

Lowest Processing Fees: SBI, PNB and Bank of Baroda

SBI charges 0.25% to 0.30% depending on the loan amount, and PNB charges up to 0.30%. Bank of Baroda charges nothing up to Rs 3 lakh and 0.50% above that. For a smaller loan, these low fees can matter as much as the interest rate.

Private Banks: Wider Rate Ranges

HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank show wider rate ranges, with the upper end reaching 16% to 20% on some schemes. Processing fees also run higher, up to 2% at ICICI and Kotak. They can still suit you if you value digital convenience or want a particular scheme, but check which rate you actually qualify for.

NBFCs: Speed and Flexibility

NBFCs generally charge more than banks, but they are known for faster disbursal and many branches. They can be useful when you need money urgently. Compare the full cost before you decide.

Look Beyond the Interest Rate: Why Processing Fees Matter

A low interest rate can be offset by a high upfront fee. On a loan of Rs 5 lakh, a processing fee of 2% is Rs 10,000, while a fee of 0.30% is Rs 1,500, before GST. That is a difference of Rs 8,500 on day one. Always add the fee to the interest cost to see what the loan really costs.

Factors to Compare Before You Choose

• Interest rate and scheme type: Compare EMI, bullet and overdraft options, as each can have a different rate
• Processing fee: It is charged upfront and can range from nil to 2%
• Loan-to-value (LTV) ratio: A higher LTV means a bigger loan against the same gold, but also more risk if prices fall
• Prepayment and foreclosure rules: Some lenders charge a fee if you close the loan early
• Tenure and repayment flexibility: Pick a plan that matches your cash flow
• Safety of your gold: Choose a lender with secure storage and clear insurance terms

Tips to Get a Lower Gold Loan Cost

1. Compare offers from at least three lenders, including a public sector bank
2. Ask for the all-in cost, including processing fee, taxes and other charges
3. Choose a repayment type that suits you, since bullet schemes may carry a lower rate
4. Borrow only what you need to keep interest costs low
5. Ask about rate concessions for existing customers or larger loan amounts

Things to Keep in Mind

A low rate is attractive, but it is not the only thing that matters. Read the loan agreement carefully, understand what happens if you miss a payment and make sure you can repay on time. If you do not repay, the lender can auction your gold. This article is for general information and is not financial advice.

Conclusion

The lowest rate on paper is not always the cheapest loan. Public sector banks such as PNB and Bank of Baroda lead on rates in this comparison, SBI stands out for its low processing fee, and private banks offer wider scheme choice at a higher cost. Compare rates, fees, LTV and repayment terms side by side, confirm the latest numbers with the lender and choose the option that fits your need and budget.

Explore More with FinVedik GoldBiz

Planning to borrow against your gold? Visit our Gold Loan page to explore gold loan options and compare before you apply.

Frequently Asked Questions

Which bank has the lowest gold loan interest rate in October 2026?

Among the lenders compared here, Punjab National Bank (8.50% to 9% p.a.) and Bank of Baroda (8.90% to 9.00% p.a.) show the lowest indicative rates as on October 1, 2026. Your actual rate depends on the scheme, loan amount and tenure.

Which bank has the lowest processing fee on a gold loan?

Bank of Baroda charges no processing fee on loans up to Rs 3 lakh and 0.50% above that. PNB charges up to 0.30% and SBI charges 0.25% to 0.30% depending on the loan amount. ICICI Bank and Kotak Mahindra Bank charge up to 2%.

Are NBFC gold loans costlier than bank gold loans?

Often yes. NBFCs usually charge higher interest than public sector banks, but many offer faster disbursal and flexible schemes. Compare the total cost, not just the headline rate.

What is the difference between EMI and bullet repayment gold loans?

With EMI repayment you pay principal and interest every month. With bullet repayment you pay the principal and interest at the end of the tenure. Bullet loans can carry a lower rate but need a lump sum at maturity.

How much loan can I get against my gold?

The amount depends on the weight and purity of your gold and the lender's loan-to-value (LTV) ratio. Under RBI's revised rules, smaller loans can get a higher LTV, up to 85%.

Does the interest rate depend on loan amount and tenure?

Yes. Many lenders offer different rates by loan size, scheme, tenure and repayment type, which is why the same bank can show a wide rate range. Always check the scheme details.

Are there fees apart from interest on a gold loan?

Yes. Common charges include a processing fee, valuation or appraisal charges, late-payment charges and sometimes a foreclosure fee, plus GST. Ask for a full fee schedule before you sign.

How can I get a lower gold loan interest rate?

Compare at least three lenders, choose a scheme that matches your repayment plan, borrow only what you need and ask whether a rate concession is available for existing customers or larger loans.