Bank of Baroda vs Union Bank vs SBI
Gold loans as a proposition are on its way to become the leading source of lending for many. This is due to the fact that the metal serves to be a great collateral backed by its solid intrinsic value, and great demand in primary as well as the secondary market in the country. Also, the lending infrastructure - be it the formal infrastructure or the informal one has proven to provide a fair share towards the demand and the support to enable and enhance lending against gold in the country.
There are several major players in the gold loan market, not counting the players in the unorganized sector, several NBFCs and banks offer gold loan as one of their major lending propositions. Among many banks, there are Union Bank of India, Bank of Baroda, and State Bank of India (SBI) in the public sector banking industry offering gold loan solutions.
Lets delve deep into their offerings which will help us in making a gold loan comparison among the three major banks:
Bank Of Baroda Gold Loans:
Bank of Baroda is one of the leading banking institutions in India with several branches across almost all states in the country. The bank has made a name for itself backed by their solid customer retention ability, and robust banking services. The institution has its reach in various lending products in the lending industry like credit cards, home loans, vehicle loans, as well as gold loans.
Their gold loan offers are pretty solid and the fact that it’s a public sector unit earns the bank some brownie points. The gold loan offering can be best explained as below:
Features:
| Maximum Loan amount | Up to INR 50 lakhs per customer | | :---- | :---- | | Processing charges | Nil processing charges up to INR 3 lakhs | | Preclosure/Pre-payment charges | Nil pre-closure or pre-payment charges | | EMI Scheme Option | 12 months and 36 months plans available | | Repayment | Monthly interest payment + bullet payment towards principal during tenure / EMI option | | Minimum Gold Quality | Minimum 18 carat purity gold | | Loan Purpose | All purpose except speculation |
Union Bank Gold Loans:
Union bank of India is among the biggest public sector banks in the country. The bank enjoys high public trust and a huge customer base to service and cross-sell their banking products. The bank has been doing remarkably well when it comes to their lending proposition and has made great strides towards making their offerings highly competitive in the lending market.
Their gold loan proposition is as follows:
| Loan Scheme | Union Bank Gold loan Interest Rates | Loan Amount | Processing Fee | | ----- | ----- | ----- | ----- | | Union Krishi Kamdhenu Gold Loan Scheme | 10.00% p.a. (1-year MCLR + 1.00%) | Up to ₹25 lakh | Not specified | | Union Gold Loan-Agriculture | 10.00% p.a. (1-year MCLR + 1.00%) | ₹25 lakh to ₹50 lakh | Not specified | | Union Swarna Shakti Loan Scheme-Retail | 9.95% p.a. (EBLR + 0.70%) | Up to ₹50 lakh | Nil | | Union MSME Gold Loan Plus | 9.95% p.a. (EBLR + 0.70%) | Up to ₹50 lakh | ₹500 for loans above ₹10 lakh | | Union Gold Loan-Retail | 9.95% p.a. (EBLR + 0.60% to 0.70%) | Up to ₹50 lakh | 0.50% of loan amount or maximum ₹1,000 |
Features:
- Loan to value (LTV) : A maximum of 75% LTV offered for non-agricultural loans
- Loan tenure : Loan tenure up to 12 months given for gold loans
- Gold purity consideration : 22 carat and 24 carat gold accepted; for gold below 22 carat purity - an additional 0.25% interest rate applies
State Bank of India (SBI) Gold loans:
State Bank of India is the largest public sector bank in the country. With their operations both in India as well as overseas, the bank has been a longstanding banking partner to millions of Indians across the world. The bank is not only the leading public sector bank but also one of the top gold loan providers in India in the banking sector.
The bank also offers a host of lending products including gold loans offering. Below is a detailed commercial information about SBI’s gold loan offering in India:
| Loan Scheme | SBI Gold Loan Interest Rates | Loan Amount | Processing Fee | Repayment Period | Margin Requirement | | :---: | :---: | :---: | :---: | :---: | :---: | | EMI-Based Gold Loan | 7.50% p.a. (1-year MCLR + 0.50%) | ₹20,000 to ₹50 lakh | 0.50% of loan amount (min ₹500 + GST) | Up to 36 months | 25% | | 3-Month Bullet Repayment Gold Loan | 7.50% p.a. (1-year MCLR + 0.50%) | ₹20,000 to ₹50 lakh | ₹200 + GST | 3 months | 30% | | 6-Month Bullet Repayment Gold Loan | 7.50% p.a. (1-year MCLR + 0.50%) | ₹20,000 to ₹50 lakh | ₹300 + GST | 6 months | 30% | | 12-Month Bullet Repayment Gold Loan | 7.50% p.a. (1-year MCLR + 0.50%) | ₹20,000 to ₹50 lakh | 0.50% of loan amount (min ₹500, max ₹10,000 + GST) | 12 months | 35% |
Features:
- Gold Loan Eligibility : individuals over 18 years of age with a steady income (no income proof required)
- Gold Loan Repayment options : EMI based and bullet payment based repayment options available (3, 6, or 12 months)
- Gold Loan limit : maximum gold loan of INR 50 lakhs can be availed per individual
- Foreclosure Charges : No foreclosure charges applicable
- Gold Coins : Loans given against specially minted gold coins sold by banks, with maximum weight limit being 50 grams per customer
