A gold loan in India is a quick and convenient way to secure funds by pledging gold as collateral. With minimal documentation and fast approval, it serves as a hassle-free solution for emergencies, business needs, or personal expenses.
The rise of digital banking has made it easier than ever to apply for a gold loan in India. Leading banks and Non-Banking Financial Companies (NBFCs) offer seamless processes, allowing borrowers to check eligibility, submit documents, and receive loan approval with just a few clicks.
What is a Gold Loan and How Does It Work
A gold loan is a secured loan where you pledge gold jewellery as collateral. Banks and NBFCs offer up to 75% of its market value, based on purity and weight. With low interest rates, it’s a fast and cost-effective financing option.
Gold Assessment
The borrower visits a bank or a Non-Banking Financial Company (NBFC) or applies online. The lender checks the gold’s purity, weight, and market value to decide the loan amount.
Loan Approval
The lender offers a loan amount based on the gold assessment. This is usually up to 75% of the gold’s value, as per the Reserve Bank of India’s (RBI) guidelines.
Documentation and Pledging
The borrower submits basic documents for a gold loan, such as identity and address proof. The gold is pledged as collateral, and a loan agreement is signed.
Loan Disbursal
After verification, the loan amount is disbursed quickly. Borrowers receive funds through bank transfer, cheque, or cash.
Repayment and Gold Retrieval
The borrower repays the loan in instalments or a lump sum. Once fully repaid, the pledged gold is returned safely.
Gold Loan Eligibility Criteria
To qualify for a gold loan, borrowers must meet certain criteria set by the lender. These requirements ensure eligibility and determine the loan amount based on the pledged gold. The key criteria include:
- Age: You must be at least 18 years old
- Employment: Both salaried and self-employed individuals can apply
- Gold Ownership: You must own gold jewellery or ornaments
- Gold Purity: The gold must meet the lender’s purity standards
- Income: A steady source of income is preferred but not mandatory
- Documentation: Basic identity and address proof are required
- Loan Amount: The amount depends on the gold’s value and purity
- NRI Eligibility: Some lenders may not offer gold loans in India to Non-Resident Indians (NRIs)
Documents Required to Apply for a Gold Loan
To apply for a gold loan, borrowers need to submit basic documents for verification. These ensure identity, address, and eligibility compliance. The list of documents for a gold loan includes:
- Identity Proof: Aadhaar Card, PAN Card, Voter ID, or Passport
- Address Proof: Utility bills, Aadhaar Card, Ration Card, or Rental Agreement
- Photographs: Recent passport-sized photographs
- Income Proof (if required): Salary slips or bank statements for higher loan amounts
Most lenders require minimal paperwork, making the process quick and hassle-free.
Online vs Offline Gold Loan Application
When applying for a gold loan in India, you can choose between online and offline methods. Each option has its own benefits and limitations. Here’s a comparison to help you decide:
Online Gold Loan Application
- Convenience: Apply from anywhere without visiting a branch
- Quick Processing: Get faster approval and disbursal with minimal paperwork
- Digital Verification: Upload documents online for instant verification
- Limited Physical Evaluation: You may still need to visit a branch for gold assessment
- Internet Dependency: A stable internet connection is required for a smooth process
Offline Gold Loan Application
- In-Person Assistance: Get help from bank officials for queries and documentation
- Gold Security: Your gold is assessed and safely stored at the lender’s branch
- Longer Processing Time: Manual verification may delay loan approval
- More Paperwork: You need to submit physical copies of documents
- Branch Visits: A personal visit to the bank or NBFC is required for loan processing
Banks and NBFCs Offering Online Gold Loans
Several banks and NBFCs offer online gold loans in India with competitive interest rates. Here is a comparison of some well-known lenders and their loan terms:
| Bank or NBFC | Minimum Interest Rate | Minimum Loan Amount | Loan Tenure |
| Bajaj Finserv | 9.48% p.a. | ₹ 5,000 | Up to 12 Months |
| IIFL Finance | 11.88% p.a. | ₹ 3,000 | Up to 24 Months |
| indiagold | 9.24% p.a. | ₹ 20,000 | 61 Days to 12 Months |
| Muthoot Finance | 9.96% p.a. | ₹ 1,500 | 7 Days - 36 Months |
| Muthoot FinCorp ONE | 9.96% p.a. | ₹ 1,550 | 3 Months - 12 Months |
| Rupeek | 8.88% p.a. | ₹ 25,000 | 3 Months - 12 Months |
A gold loan in India offers instant cash with minimal paperwork and flexible repayment. Apply online or offline, compare lenders, interest rates, and terms to choose the best option for your needs and secure a loan with confidence.
Disclaimer: No Business Standard Journalist was involved in creation of this content