Gold loans
A gold loan is money borrowed against gold ornaments or coins, which the lender keeps until you repay. It is quick, needs little paperwork, and does not depend much on your income. The tenure is short — usually a few months to a year or two — and if you do not repay, the lender can sell the gold after notice.
We explain what lenders usually ask for and help you get your papers in order — the first call is free.
Estimate your interest
Gold loan estimator (estimate only)
Enter the amount, the yearly rate and how many months you will keep the loan. Gold loans are usually repaid in one amount at the end, or with monthly interest and the principal at the end — choose the option your lender offers. Simple interest, no charges, no compounding is assumed.
Estimate only. Your lender sets the actual rate, EMI and charges.
Many gold loans are repaid in one amount at the end, with interest paid monthly or at the end. Estimate only.
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Details
What lenders usually check
- The gold: purity (usually 18 carat and above), net weight after stones, and current value.
- Your identity and address.
- For larger amounts, the source of the gold or your income.
Documents to keep ready
- Identity and address proof.
- The ornaments themselves, for testing and weighing in front of you.
- A recent photograph; some lenders ask for PAN above a threshold.
Repayment
Common options: pay interest monthly and the principal at the end; pay everything at the end (bullet); or regular EMIs. Ask which options the lender offers and what happens if you pay late.
Interest and charges
Rates vary widely between banks and NBFCs. Ask about valuation charges, processing fee, late-payment charges and any charge for early closure. Read what happens if gold prices fall and the lender asks for part-payment.
Security or own contribution
The gold itself. RBI caps how much of the gold’s value a lender may advance, in bands by loan size. The gold must be returned within seven working days of full repayment; the lender owes you compensation for its own delay beyond that. Check the current rules on rbi.org.in.
How to prepare
Take only what you need to pledge. Ask for the purity and weight to be tested in front of you and recorded on the pledge receipt. Keep the receipt safe. Note the due date and the auction terms before you sign.
Questions about gold loans
How much can I borrow against my gold?
A share of the gold’s current value, within RBI limits; the lender decides the exact amount from its valuation.
Is my income checked?
Usually lightly or not at all, because the gold is the security. Larger loans may need income or source-of-gold details.
Where is my gold kept?
In the lender’s vault, insured, until you repay. Get a pledge receipt listing each item, weight and purity.
What if I cannot repay on time?
The lender charges penal interest and, after written notice, can auction the gold. Contact the lender before the due date to ask about renewal or part-payment.
Can I renew or extend the loan?
Many lenders allow renewal after paying the interest due, subject to a fresh valuation.
How soon do I get my gold back?
Within seven working days of full repayment, under current RBI rules.
Is a bank or an NBFC better for a gold loan?
Both offer them. Compare the rate, charges, safety arrangements and the terms for late payment and auction.
What we do here: we explain what lenders usually ask for and help you get your documents in order. We do not lend, arrange loans or take commission. The first call is free. See what we do.
