Gold Loan

Gold loan is an option that can be offered to meet urgent cash requirements. You can submit gold ornaments, jewellery, and coins as collateral in order to get the bank or lender to give you a loan.The bank will return the gold items to the person who borrowed it from them in a safe and secure manner.The interest rate on gold loan is as low as 7.00% onwards per annum, making it a secure and affordable option.

Eligibility & Documentation

To be eligible for a gold loan, applicants are required to have self-owned gold, gold ornaments or coins appraised by a bank nominated appraiser. You must be 18 years or older, have a steady source of income, and be able to work up to 65 years.

Documents Required

Banks typically ask for the following documents:

  • Your application form should include 2 passport-sized photographs.
  • To generate the KYC Documents of applicant: PAN card, Passport, Aadhar card, Voter’s ID card, Driving License, Utility Bills.
  • Last 12 months’ bank statement and Any other document required by the lender.

Factors that affect the interest rate

When you borrow money from a bank, the interest rate that the bank charges you is directly related to the loan amount.That is why, if you need a large loan amount, be prepared to pay higher interest rates on it!

Loan amount bracket

Interest Rate

Up to Rs. 3 Lakh

7.05% p.a.

Between Rs. 3 Lakh & up to Rs. 5 Lakh

7.70% p.a.

Over Rs. 5 lakh

8.15% p.a.

1. Weight and Purity: The amount of gold you can borrow depends on the purity of the gold articles you select. The greater the quality of the gold articles, the higher your maximum loan amount will be.

2. Income: Most banks do not require income proof from applicants. Banks prefer approving those customers with stable income sources.

3. Lending rate of banks: The interest rate offered to applicants by banks is determined by the marginal cost of funds (MCLR) or RRLLR. In order to reduce the amount of stress a person may experience, banks are cutting the repo rate much faster to applicants.

Things you should know before applying for gold loan include the following:

  1. Maximum Loan Amount – Banks offer a percentage of the value of gold as an amount that you can borrow. With gold jewellery, you can get up to 90% of the value of gold in it as a loan amount. The bank has the final say on how much loan amount it will extend to applicants- so if the appraised gold articles are Rs. 10,000 then you would get up to Rs. 9,000 as a loan amount.
  2. Safety of Your Gold Item – If you submit your gold articles with a bank, they will take it upon themselves to protect and safeguard it. A lender may also insure your gold articles. If you wish, you can enquire about the bank’s safety measures to safeguard them.
  3. Loan Payments Default – In the event you fail to pay off your loan amount, the bank reserves the right to auction off your gold articles. You must pay off the amount you have borrowed in a timely manner.

Gold Loan Repayment Methods

  • Bullet repayment: This method is known as bullet repayment. This method requires you to repay the entire amount, principal and interest, as a lump sum at the end of your tenure.
  • Pay Interest as EMI & Principal Later – You can repay the interest amount per month, but it is recommended you do so in full at the end of tenure.
  • Regular EMI – The interest and principal on the loan will be paid every month for the full duration of it.


Have a question? We've got answers!

The bank is offering a gold loan to applicants who meet certain eligibility criteria. These include owning gold ornaments or items, being over 18 years old, and meeting other internal qualifications.

The bank will process your gold articles and issue you a loan within a few days. However, the bank may take some time to appraise them, which could lead to an extended delay. Once the appraisal is complete and verified, you can expect a quick disbursement of the money.

In order to receive your gold ornaments, you will need to repay the entire outstanding amount of money that has been borrowed. However, in some gold loan schemes, you may be able to make a partial payment.