About Gold Loan

Gold loan (also called loan against gold) is a secured loan taken by the borrower from a lender by pledging their gold articles (within a range of 18-24 carats) as collateral. The loan amount provided is a certain percentage of the gold, typically upto 80%, based on the current market value and quality of gold.

A gold loan is a secured loan wherein the borrower keeps their gold, ranging from 18K to 24K, with a bank or a financial institution as security and avails capital against it. On comparative terms, a gold loan can be understood as a similar concept to a “mortgage loan” in which the owner keeps their house or property as mortgage with the bank and takes a loan against it to fulfill their need for capital.

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Features & Benefits

A vast array of institutions offer you the best Gold loan rates at the most competitive rates and affordable EMIs.

Interest rates

The interest rates on gold loans vary based on the purity of gold. The higher the purity of gold, the higher the amount that can be availed. Interest rates vary from 8% per annum to 18% per annum in the public sector, whereas in the private sector these rates are as as high as 24% per annum.

Loan to Value Ratio (LTV)

Loan to value ratio or LTV ration means the amount a customer will get against the value of gold. For example, if the value of jewelry is INR 10,000 and the LTV is 65%, the maximum loan amount the customer can get would be INR 6,500.


A gold loan is generally a short-to-medium term loan, where the tenure ranges from six months to 24 months. Thus, it is not a long-term loan instrument.

Loan available even to Low Credit Scorers

As the jewelry will be deposited with the bank as collateral against the loan, the bank is confident of sanctioning a loan to the person even with a low credit score.

Eligibility Criteria

To qualify for a Gold Loan, you have to meet certain criteria. Below are the important factors that lenders take into consideration to decide your eligibility for a Gold Loan.


Typically, borrowers should be 18 years or older.


You must own the gold being pledged.

Gold Quality

The gold should meet the lender's purity standards.


Valid government-issued ID for identity verification.

Documents Required

Below is some of the basic documents which are required at the time of Gold Loan

  • Identity and signature proof
  • Voter ID
  • Passport
  • Aadhaar Card
  • Driving License
  • PAN Card
  • Employee Identity Card (in case of government employees)
  • Address Proof
  • Rent Agreement
  • Bank Statement
  • Voter ID Card
  • Passport
  • Driving License
  • Telephone/Electricity/Water/Credit Card bill or Property tax.
  • Two post-dated cheques for security purposes
  • Passport-size photographs

Frequently Ask Questions

If you have a question that deals with clients, customers or the public in general, then have a look at some of the basic FAQs.

A gold loan is a secured loan where you pledge your gold ornaments or assets as collateral to borrow money from a financial institution.

The loan amount depends on the purity and weight of the gold. Lenders usually offer around 60-75% of the gold's value as a loan.

Repayment periods are flexible, usually ranging from a few months to a few years, depending on the lender's terms.

If you can't repay, the lender will auction the gold to recover the loan amount. It's essential to communicate with the lender to explore options before this happens.

Lenders usually have secure storage facilities for the pledged gold to ensure its safety.

Charges may include processing fees, valuation fees, and in some cases, foreclosure charges or late payment fees.