What is the interest rate for OD against gold loan?

The interest rate for an overdraft (OD) facility against a gold loan is generally in the same range as a standard gold loan but the exact rate you receive depends on the lender’s policies, the amount you borrow, and the purity of your gold. As of May 2025, interest rates for gold loan overdrafts in India typically start from around 8% per annum and can go up to 24% or even higher with some lenders. The rate you’re offered may also be influenced by the tenure chosen and your relationship with the lender.

One of the key benefits of a gold loan overdraft is that you only pay interest on the amount you actually use, not on the entire sanctioned limit. For example, if you have an overdraft limit of ₹2 lakh but only withdraw ₹50,000, interest is charged only on the ₹50,000 for the period it is outstanding. This makes the facility cost-effective for borrowers who need funds intermittently or in varying amounts throughout the year.

It’s important to remember that, in addition to the interest rate there may be other charges like processing fees, valuation charges, and documentation costs. Always ask your lender for a clear breakdown of all applicable charges before availing the overdraft facility.