What you need to know
You can close a gold loan any time. Floating-rate loans to individuals have no prepayment charge; some fixed-rate or NBFC schemes charge a minimum interest period (e.g. 7 days) or a small fee.
RBI prepayment rules
| Situation | Rule |
|---|---|
| Floating-rate loans to individuals (non-business) | No prepayment / foreclosure charge — any lender, part or full, from any source of funds |
| Loans sanctioned or renewed from 1 Jan 2026 | RBI (Pre-payment Charges on Loans) Directions, 2025 also bar charges on floating-rate business loans to individuals and MSEs at most banks and large NBFCs; no minimum lock-in |
| Fixed-rate loans | Lender may charge as per the sanction letter and Key Facts Statement |
| Disclosure | Any charge must be shown in the sanction letter, loan agreement and KFS; waived charges cannot be levied later |
Lender-wise
| Lender | Processing fee | Prepayment / foreclosure |
|---|---|---|
| Indian Bank Jewel Loan | About 0.25% + GST | No charge on floating-rate loans to individuals |
| PNB Gold Loan | 0.30% of loan or ₹500, whichever is higher, + GST | No charge on floating-rate loans to individuals |
| Muthoot Finance Gold Loan | Service/processing charges vary by scheme; security charge 0.15% (₹100 – ₹1,000) | Part payment and closure allowed any time; interest charged for the period used |
| HDFC Bank Gold Loan | Up to 1% of loan + GST; valuation ₹250 – ₹575 | Pre-closure charge up to 1% on some fixed-rate variants — check the KFS |
| SBI Gold Loan | 0.25% + GST (min ₹250); waived on some bullet variants | No prepayment charge on floating-rate loans; bullet loans can be closed any time with interest to date |
| IIFL Finance Gold Loan | Up to 2% + GST depending on scheme | No part-payment or foreclosure charge (minimum 7 days’ interest) |
| Axis Bank Gold Loan | ₹300 up to ₹2 lakh; 0.50% + GST above ₹2 lakh | As per sanction terms; no charge on floating-rate loans to individuals |
| Manappuram Finance Gold Loan | Processing ₹25 + tax; insurance ₹25 | Close any time; interest for the days used |
Frequently asked questions
Can I part-pay and get some jewellery back?
Many lenders allow partial release if the remaining gold still covers the loan within the LTV cap.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.