Union Bank of India offers competitively priced gold loans with interest rates that vary based on the loan type, amount, gold purity, and borrower category. For 2025, interest rates generally range from approximately 7.75% to 10% per annum and differ between agricultural, priority, and non-priority sectors. The bank follows either the 1-year Marginal Cost of Funds Based Lending Rate (MCLR) or the External Benchmark-based Lending Rate (EBLR) to set its gold loan interest rates.
Union Bank Gold Loan Interest Rates Overview
The gold loan interest rates at Union Bank of India depend on various factors such as loan amount, scheme category, gold purity, and borrower profile (male or female). The interest rates range roughly between 7.75% per annum for select agricultural loans and go up to around 10% for non-priority or MSME gold loan schemes.
- For agricultural gold loans (Union Krishi Kamdhenu Gold Loan Scheme), the interest rate for 22 Karat gold is about 9.10% for male borrowers and slightly lower at 9.00% for female borrowers.
- For loans under other priority sectors, interest rates vary around 8.65% to 8.90% depending on the loan size.
- Non-priority sector loans have marginally higher rates, with rates up to 8.90% or 10% when considering some MSME or retail loans.
- The rate for gold loans tied to the 1-year MCLR is currently about 7.75%, while the EBLR stands at around 8.20%.
Union Bank’s gold loan interest rates are structured to support priority sectors like agriculture at lower costs, demonstrating the bank’s focus on inclusive lending.
Gold Loan Schemes and Interest Rate Structure
Union Bank provides various gold loan schemes tailored to different customer needs:
- Union Krishi Kamdhenu Gold Loan Scheme: Specifically aimed at farmers and agricultural allied activities with competitive interest rates linked to the 1-year MCLR, generally around 7.75% to 9.10% per annum depending on borrower gender and gold purity.
- Union MSME Gold Loan Plus: Targeted at micro, small and medium enterprises, with interest rates near 9.65% to 10% per annum.
- Union Swarna Shakti Loan Scheme-Retail: Designed for retail customers, the interest rates range approximately from 8.85% to 8.95% depending on gender and benchmark.
- Other Priority and Non-priority Loans: These loans attract slightly higher interest rates, typically starting around 8.65% and going up to 8.90% or more based on loan amount and sector classification.
For gold with lower purity (below 22 Karat but up to 20 Karat), the interest rates are generally about 0.25% higher than for 22 Karat gold loans.
Loan Amount, Tenure, and Processing Fees
Union Bank gold loans can range from as low as Rs. 25,000 up to Rs. 50 lakh or even Rs. 1 crore depending on the scheme and borrower eligibility. The tenure of the gold loan usually extends up to 12 months, which aligns with typical borrower needs for short-term credit.
The processing fees for gold loans vary according to the bank’s extant guidelines but typically range from Rs. 100 to Rs. 500 plus applicable GST. Appraisal charges are around 0.4% of the loan amount with a minimum of Rs. 100 and a maximum of Rs. 500.
Rate Comparison with Other Banks
Union Bank of India’s gold loan interest rates at 7.75% to 10% are competitive compared to other major Indian banks. For reference:
- State Bank of India offers gold loans at around 8% per annum.
- Bank of India’s rates range between 7.25% and 8.90%.
- Private lenders like Bajaj Finserv charge higher rates, from 10% upwards.
This makes Union Bank a favorable choice for customers seeking attractive interest rates combined with the trust associated with a public sector bank.
Important Considerations
- The gold loan interest rates can change with revisions in RBI repo rates since the rates are often benchmarked to repo or MCLR.
- Union Bank offers a gold loan calculator tool that helps borrowers calculate EMIs and plan their repayment schedule based on loan amount, interest, and tenure.
- The loan-to-value (LTV) ratio for gold loans is usually up to 75-85% of the market value of the pledged gold, allowing borrowers to get a substantial loan amount against their gold assets.
- Interest rates for female borrowers are marginally lower in certain schemes as part of gender-inclusive banking policies.
Conclusion
Union Bank of India provides competitively priced gold loans with flexible schemes tailored to agricultural, MSME, and retail sectors. Interest rates typically range from 7.75% to 10% per annum, with factors like gold purity, loan amount, and borrower category influencing the exact rate. The bank’s linkage of interest rates to MCLR and EBLR ensures alignment with market conditions and RBI rate changes, offering transparency and fairness. With processing fees kept relatively low and the availability of online application and gold loan calculators, Union Bank gold loans remain a practical and attractive option for borrowers needing quick credit against their gold assets in 2025.
