Punjab National Bank (PNB) is one of India’s leading public sector banks. It offers several financial products to meet various customer needs. Among these, the PNB Gold Loan stands out as a fast and convenient way to get money by pledging your gold. Whether you want to meet urgent expenses or invest in your business, a PNB Gold Loan can help.
This article will explain everything about the PNB Gold Loan, including types, eligibility, interest rates, fees, repayment options, and how to apply. We will also cover related schemes like agricultural gold loans and loans against Sovereign Gold Bonds. By the end, you will have a clear picture of how to use this loan to your benefit.
What is a PNB Gold Loan?
A PNB Gold Loan lets you borrow money against the security of gold. You pledge your gold jewelry or gold bonds to the bank. The bank holds this as collateral. However, you retain ownership of the gold during the loan tenure.
This loan is useful for personal needs like marriage, education, or emergencies. Farmers can also get loans for agriculture-related expenses. Moreover, if you hold Sovereign Gold Bonds (SGBs), PNB lets you get loans against them without selling the bonds.
The main advantage of a gold loan is quick approval and easy processing. Since gold acts as security, banks give loans at lower interest rates compared to unsecured loans. In short, a PNB Gold Loan offers you quick cash without selling your gold.
Types of PNB Gold Loans
PNB offers three main gold loan schemes:
1. Non-Agricultural (Retail) Gold Loan
This loan is for individuals who want to meet personal or non-agriculture business needs. You can use it to cover medical bills, education fees, weddings, or other unforeseen expenses. The bank provides loans for amounts ranging from ₹25,000 to ₹25 lakh. The maximum loan amount per borrower is ₹10 lakh.
2. PNB Swarnim (Agricultural Gold Loan)
PNB Swarnim is designed for farmers and others involved in agriculture. This loan supports crop production, purchase of seeds, fertilizers, farm machinery, and allied activities. Eligible applicants include tenant farmers, sharecroppers, and agricultural entrepreneurs.
The minimum loan amount here is ₹50,000, and the maximum depends on your requirement. You can also use this loan to repay loans taken from non-institutional lenders.
3. Loan Against Sovereign Gold Bonds (SGBs)
This scheme allows individuals, trusts, Hindu Undivided Families (HUFs), and charitable institutions holding SGBs to get loans against their bonds. Loans are available only against SGBs held in dematerialized form.
This option helps you leverage your gold investments without selling the bonds. The maximum tenure matches the bond maturity, usually up to 8 years.
Who Can Apply?
The eligibility criteria vary depending on the loan type:
- Non-Agricultural Gold Loan: Any individual resident of India can apply.
- Agricultural Gold Loan (PNB Swarnim): Eligible applicants include all farmers, tenant farmers, oral lessees, sharecroppers, and agri-entrepreneurs engaged in allied activities.
- Loan Against SGB: Individuals, trusts, HUFs, and charitable institutions holding sovereign gold bonds in demat form.
Loan Amounts and Margins
PNB sets minimum and maximum loan amounts based on the loan scheme.
| Loan Type | Min Loan Amount | Max Loan Amount | Margin Requirement |
|---|---|---|---|
| Non-Agricultural Gold Loan | ₹25,000 | ₹25 lakh (max ₹10 lakh per borrower) | 28-32% (depends on facility) |
| Agricultural Gold Loan | ₹50,000 | Need-based | 15% |
| Loan Against SGB | Varies | Based on bond value | 25% (individuals), 40% (others) |
What is Margin?
Margin is the percentage of the gold’s value that the bank does not finance. For example, if the margin is 30%, the bank will lend you 70% of your gold’s market value. You must cover the remaining 30%.
Margins help banks reduce risk and ensure you have some skin in the game.
Interest Rates on PNB Gold Loan
Interest rates are a crucial factor for any loan. PNB offers competitive rates on gold loans. The rate depends on the loan type and facility you choose.
| Loan Type | Interest Rate Model | Current Rate (Approx.) |
|---|---|---|
| Non-Agricultural Gold Loan | RLLR + Basis Points | 8.85% |
| Agricultural Gold Loan (PNB Swarnim) | Linked to MCLR (1 Year) | 9.05% |
| Loan Against Sovereign Gold Bonds | RLLR + Basis Points | 8.85% |
What Are RLLR and MCLR?
- RLLR (Retail Lending Linked Rate): A base rate set by PNB for loans.
- MCLR (Marginal Cost of Funds Based Lending Rate): Another benchmark for loan interest, linked to the bank’s cost of funds.
PNB adds a small margin above these base rates to decide your final interest rate.
Loan Tenure and Repayment Options
PNB provides flexible repayment options depending on the loan scheme:
| Loan Type | Repayment Type | Maximum Tenure |
|---|---|---|
| Demand Loan (Non-Agricultural) | Bullet (full repayment at end) | 12 months |
| Term Loan (EMI based) | EMI (monthly payments) | 36 months |
| Overdraft Facility | Flexible withdrawals & repayments | 36 months (annual review) |
| Agricultural Gold Loan | Demand Loan | 12 months |
| Loan Against SGBs | Demand or Flexible | Up to 8 years or bond maturity |
Bullet repayment means you pay the full loan amount with interest in one lump sum at the end of the tenure. On the other hand, EMI means equal monthly installments for principal plus interest.
The overdraft facility lets you withdraw money as needed, repay it, and withdraw again during the tenure, subject to annual review.
Fees and Charges
PNB keeps the charges transparent and affordable:
- Processing Fee:
- 0.30% of the loan amount + GST or ₹500 + GST, whichever is higher.
- No fee if loan amount is up to ₹50,000.
- ₹500 + GST for loans between ₹50,000 and ₹2 lakh.
- Documentation Charges: None.
- Valuation Charges:
- ₹3 per 1,000 + GST, max ₹500 + GST for loans up to ₹5 lakh.
- ₹1,000 + GST for loans above ₹5 lakh.
These charges cover the costs of processing and assessing your gold collateral.
Security for PNB Gold Loan
You must pledge your physical gold jewelry or ornaments with the bank as collateral. The bank holds the gold safely until you repay the loan. For loans against Sovereign Gold Bonds, the bank places a lien on the bonds held in your demat account.
This security reduces the risk for the bank and enables them to give you funds quickly.
Loan Disbursement Process
PNB disburses gold loans by crediting the loan amount directly into your bank account. The bank does not give cash disbursements. For agricultural loans, the money goes into your savings or Kisan Credit Card account. For loans against SGBs, it credits your operative account.
This method is safe, fast, and traceable.
Documents Required for PNB Gold Loan
To apply for a gold loan, you must submit:
- Identity proof (Aadhar card, PAN card, passport, voter ID)
- Address proof (utility bill, ration card, passport)
- Passport-sized photographs
- Proof of gold ownership (for retail loans)
- Demat account details (for loans against SGBs)
These documents help the bank verify your identity and ownership of gold.
How to Apply for PNB Gold Loan
You can apply for a PNB Gold Loan in two ways:
- Visit the nearest PNB branch: Submit your gold and documents. Bank officials will assess your gold and loan eligibility. Upon approval, you get the money credited to your account.
- Apply online: Some PNB branches offer online application. Upload documents and request a gold loan. Bank officials may contact you for verification and gold appraisal.
The entire process is usually quick, and you can get funds within hours or a day.
Benefits of PNB Gold Loan
- Quick Processing: Gold loans get processed faster than other loans.
- Low Interest Rates: Because the loan is secured, rates are lower.
- Flexible Tenure: You can choose repayment options as per your ability.
- No Hidden Charges: Transparent fees and charges.
- Keep Your Gold: You don’t have to sell your gold to raise money.
- Easy Eligibility: No complex income proofs required.
- Multiple Loan Options: Retail, agricultural, and SGB loans available.
Things to Keep in Mind
- Always check the latest interest rates before applying.
- Repay the loan on time to avoid penalties.
- Understand the fees involved clearly.
- Keep your gold documents handy.
- Know the loan-to-value ratio (LTV) to estimate your loan amount.
Conclusion
PNB Gold Loan is a reliable and quick way to raise funds using your gold assets. Whether you need money for personal needs, agriculture, or want to leverage your Sovereign Gold Bonds, PNB offers flexible loans with competitive rates.
Make sure to understand the loan terms, fees, and repayment options before applying. Always borrow responsibly and plan your repayments to avoid financial stress.
Visit your nearest PNB branch or check their website for the latest details and start your loan application today!
