Eligibility for SBI gold loan

The applicant needs to be at least 18 years or older. Any individual (singly or jointly) with steady source of income can apply for the loan.

At present this loan facility is only available to existing customers of SBI.

Limit on loan amount and security on loan

The maximum limit on the loan is Rs 20 lakh and the minimum amount has to be Rs 20,000. Note that the minimum amount limit could be lower in rural areas. Please confirm it at your branch.

As for security, gold ornaments can be pledged after they are duly verified for quality and quantity. gold coins issued by SBI can also be pledged.

Documents needed

At the time of applying for loan:

• Application for the gold loan
• Two copies of photographs
• Valid ID proof of address
• Witness letter in case of illiterate borrowers

At the time of disbursement

• DP note and DP Note Take Delivery Letter
• Gold Ornaments Take Delivery Letter
• Arrangement Letter

Interest rate and fees

Interest rate: Interest rate will be 1.25 percent above the 1year MCLR (this rate changes according tot RBI's repo rate). Currently SBI MCLR rate for 1-year period with effect from 10 April 2019 has been fixed at 8.50 percent. The personal gold loan will, therefore, attract 9.75 percent interest rate.

Processing Fees: 0.50 percent of the loan amount + applicable GST. The fee is subject to a minimum limit of Rs 500 + applicable GST

Others: Gold appraiser charges will be paid by the applicant.

Repayment

According to SBI's website, there are three modes of repayment on its gold loans:

• Gold Loan: The repayment of principal and interest will be commence from the month
• following the month of disbursement.
• Liquid Gold Loan: Overdraft Account with transaction facility and monthly interest is to be served.
• Bullet Repayment Gold Loan: On or before the term of the loan/ on closure of account.

Maximum repayment period

• Gold Loan: 36 months
• Liquid Gold Loan: 36 months
• Bullet Repayment Gold Loan:12 months

Margin on the loans

Gold Loan: 25 percent
Liquid Gold Loan: 25 percent
Bullet Repayment Gold Loan: 35 percent

This means that the bank will fund only 75 or 65 percent (as the case may be) of the value of gold pledged by the customer.