Loan Against Sovereign Gold Bond (SGB) is a financing option offered by banks and financial institutions where you can borrow money by pledging your SGBs as collateral. It's like taking a loan against any other valuable asset like gold jewelry or property. Sovereign Gold Bonds are government-issued securities that offer a fixed interest rate and are backed by the gold price.
There are several reasons why someone might choose to take a loan against their Sovereign Gold Bonds (SGBs) instead of other borrowing options:
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The interest rates for loans against Sovereign Gold Bonds usually vary across banks. Here is an overview of the interest rates and charges for Loan Against SGB:
|₹20,000 to ₹25 Lakhs
|Sovereign Gold Bonds in both Demat and BLA/Physical Certificate form
|Starting from 8.65% p.a
|Up to 70% of the market value of SGBs depending on the loan amount
|Ranging from 12 to 36 months
Major banks offer loans against Sovereign Gold Bonds. Here is a comparative table showing the top banks that offer LASGBs with interest rates:
|Bank of Baroda
Read LessNote: The interest rates are subject to change based on your creditworthiness.
The eligibility criteria for a loan against SGB varies across lenders. However, here is a general overview of the requirements that you need to meet:
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Sovereign Gold Bonds allow investors an opportunity to avail loans against the bonds from banks and other lenders. When applying for such SGB backed loans, the key documents required to be submitted for loan processing includes:
Proof of Ownership of SGBs:
Other Financial Documents:
Loan Against SGB can be a strategic financial tool for accessing funds while retaining your gold investment and potentially benefiting from its future value. Here are the benefits of a loan against SGB:
Seeking liquidity against Sovereign Gold Bonds has been made hassle-free by banks through online loan processing and disbursal. Investors can now submit applications easily using these steps:
1. Visit the website of your chosen lender that provides SGB loans e.g. SBI, HDFC Bank, etc.
2. Look for the "Loan Against SGB" option and click on the "Apply Now" button.
3. Log in to your account and fill out the online loan application form. Provide all the required details.
4. Upload soft copies of the required documents - Identity proof, Address proof, SGB bond certificates, Financial statements, etc.
5. Provide additional KYC details and upload a photograph.
6. Accept the terms & conditions and pay the processing fee if applicable.
7. Click submit. If approved, the loan amount gets credited to your bank account directly.
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You can also check other secured loan options from below:
|Loan Against Mutual Funds
|Loan Against Securities
|Loan Against FD
|Loan Against Car
|Loan Against LIC Policy
|Loan on Credit Card
|Loan Against Gold
|Loan Against Bonds
|Loan Against Shares
|Loan Against EPF
|Loan against PPF
|Loan Against Agricultural Land
|Loan Against Property
|Loan Against Insurance Policy
LASGB allows you to borrow money using your dematerialized SBGs as collateral. It's like accessing cash without selling your gold.
You can typically borrow up to 70% of the current market value of your SBGs.
Yes, you must be a resident Indian citizen above 21 years old and hold dematerialized SGBs. Some banks may have minimum loan amounts or credit score requirements.
No, your SBGs are locked in the bank's demat account as collateral until you repay the loan in full.
The bank can sell your SBGs to recover the outstanding amount. You may also face legal repercussions.
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