Overview and Why It Matters
Muthoot Finance is the largest gold loan NBFC in India, offering quick loans against pledged gold jewellery across more than 5,000 branches nationwide. Their gold loan interest rates have evolved over time—Paisabazaar recently reports rates starting from 10.90% per annum as of May 2025. This makes Muthoot one of the more competitive lenders in the gold‑loan segment.
In this article, we break down:
- Interest rate structure by scheme
- How Muthoot compares with other lenders
- Fees, charges, eligibility, repayment options
- Tips for borrowers to optimize cost
1. loan scheme interest rate structure
Muthoot can provide gold loans at 10.90 and higher percentages per annum with other schemes with a loan duration of up to twelve months and an amount of up to 5 crore rupees. (Paisabazaar updated May 29, 2025). The rates may differ depending on the branch location, the kind of scheme and the profile of the borrower.
Interest Rates by Scheme
| Scheme Name | Region / Branches | Interest Rate (p.a.) |
| High Value Retention (HVR) | South India | 10.90% onwards |
| Muthoot Delight Loan (MDL) | South India | 11.90% onwards |
| Muthoot MUDRA Loan (MUDRA) | South India | 11.90% onwards |
| Muthoot One Percent Loan (IPL) | Rest of India | 12.00% onwards |
| Muthoot Advantage Loan (MAP/MAL) | Rest of India | 15.00% onwards |
| Best Value Scheme (BVS) | South India | 14.00% onwards |
| Muthoot High Value Loan (MHL) | Rest of India | 15.00% onwards |
| Muthoot Ultimate Loan (MUL) | Rest of India | 22.00% onwards (2% rebate if interest paid monthly) |
All interest is applied on a monthly compounding basis
2. Muthoot On Gold Loan Features & Comparisons
What Makes Muthoot Stand Out
- Minimum eligibility: Pledge gold jewellery (22–24 carat) with valuations based on purity and market price, offering up to 75% LTV.
- Loan amount range: ₹1,500 up to ₹5 crore. Some older sources mention loans up to ₹1 crore, but Paisabazaar confirms up to ₹5 crore as of Mar 2025.
- Tenure flexibility: Regular schemes for up to 12 months, EMI‑based or doorstep schemes offer up to 36 months.
Fees & Other Charges
From Paisabazaar’s May 2025 data:
- Fresh loan service charges: ₹50 per account across India; for South India, 0.15% of loan amount (min ₹100, max ₹1000)
- SMS charges: ₹5/quarter
- Custody charges: ₹5/gram/month
- Door‑to‑home loan charges: Up to ₹500
- Notice and recovery charges vary between South and Rest of India regions (e.g. ₹30 for ordinary notices, auction notice ₹120).
Comparisons at a glance
Compared to others in the market, Muthoot’s 10.90% p.a. base rate is strong, but rates vary widely depending on scheme:
- State Bank of India: ~8.75–10.20% p.a.
- Indian Bank: ~8.80–10.65% p.a.
- Manappuram Finance: ~9.90% onwards.
So, while Muthoot’s lowest rate (10.90%) is competitive, many borrowers in top government banks or IIFL might access slightly lower rates—but with slower processing or stricter eligibility.
3. Eligibility, Documentation & Application
Eligibility Criteria
- Age: 21+ years (Indian resident)
- Gold purity: Only ornaments of 22–24 carat
- Other conditions: Value, weight, and borrower profile (e.g. income or relationship with Muthoot) influence final rate & LTV.
Documents Required
- Photo ID: Aadhar, PAN, Passport, Driving Licence, Voter ID
- Address proof: Utility bills, rent agreement, voter ID, etc.
- Passport‑size photo(s)
- For a loan transfer, similar documents are required for the new application.
4. Repayment Options & Rebate Structure
Repayment Types
- Monthly interest payment: Borrower pays interest periodically, principal is due at tenure end.
- Bullet repayment: Whole amount (principal + interest) paid at maturity.
- Partial payments and pre‑closure available (often with no penalty).
Rebate Offers
- Schemes like the MUL (Ultimate Loan) offer a 2% rebate if the interest is fully paid every month.
- Some regional and scheme‑based rebates may apply if borrowers are up to date with interest payments.
5. Pros & Cons: Muthoot Finance Gold Loan
Advantages
- Fast disbursement, including doorstep loans and 30‑minute service in certain schemes.
- Huge branch network and experience make access convenient nearly anywhere.
- Flexible schemes catering to customers of varying loan‑size needs.
- Zero interest (ZIL) schemes for select products in some regions
Limitations
- Interest rates on some schemes (Ultimate Loan upwards of 22 p.a.) are much higher unless you fall under the rebate catagory.
- Fees and ancillary (charge, custody, SMS, service) fees may accumulate.
- Such high interest might not be necessary when lower base rates are available in public sector banks or any other NBFCs.
6. Best Practices for Borrowers
- Choose scheme wisely: If you’re eligible for HVR in South India, you may get the lowest rate (~10.90%). Avoid higher‑rate programs unless necessary.
- Aim for monthly interest payment for rebate benefits (e.g. MUL).
- Negotiate service charges—especially for high‑value loans, these can be flexible.
- Check all charges beyond interest: custody, SMS, doorstep, notice.
- Maintain good repayment track record to be eligible for future rebates or better terms.
- Compare offers via Paisabazaar or other loan marketplaces before committing.
7. Quick Comparison: Muthoot vs Top Alternatives
| Lender / NBFC | Starting Interest Rate (p.a.) | Loan Tenure | LTV (%) |
| Muthoot Finance | 10.90% onwards | 1–36 months | Up to 75% |
| SBI | ~8.75–10.20% | up to 35 months | ~75% |
| Indian Bank | ~8.80–10.65% | up to 35 months | ~70% |
| Manappuram Finance | ~9.90% onwards | varies | up to 75% |
| IIFL Finance | ~11.88%–27% | 3–36 months | varies |
8. Final Thoughts
To sum up:
- By May 2025, the interest rate charged by Muthoot Finance on gold loans will range between 10.90% per annum and 14.90%, depending on the scheme the applicant is in at the various areas and amounts to be taken as a loan in all parts of India.
- It is most likely that the buyers in South India who target HVR or Delight schemes receive the best prices.
- Lenders elsewhere in India can be charging as high as 22 per cent per annum yet have rebate concessions and the ability to repay in instalments.
- The cost is determined by the fees, whether there is eligibility to rebate, how it will be repaid and the purity of the gold.
- It is always a good idea to compare between lenders, watch the terms of a scheme and ensure that it is kept on-time in order to maximize net cost.
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