Gold Loan in India โ How to Apply, Eligibility & Benefits
Compare gold loan options from SBI, Muthoot, Manappuram & banks. Know interest rates, LTV ratio, eligibility, documents, and repayment options.
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Gold Loan in India โ Compare Interest Rates, Eligibility & Process
A gold loan is one of the fastest and most accessible secured loans in India. You pledge your gold jewellery or coins with a bank or NBFC and receive a loan against its value. Since the loan is secured, interest rates are lower than personal loans, and approval is almost instant.
What is a Gold Loan?
A gold loan (also called loan against gold) is a secured loan where you pledge physical gold โ jewellery, coins, or ornaments โ as collateral. Key features:
- Loan type: Secured (backed by gold)
- Loan-to-Value (LTV): Up to 75% of gold's market value (RBI mandated)
- Interest rate range: 7% โ 17% per annum (varies by lender)
- Tenure: 3 months to 4 years (typically)
- Disbursal speed: 15 minutes to a few hours
- Gold purity accepted: 18โ24 karat
Who Can Apply?
- Any Indian citizen aged 18โ75 years
- Salaried, self-employed, businessperson, farmer, homemaker โ anyone
- No income proof required in most cases
- No CIBIL score requirement (most lenders)
- NRIs can also avail gold loans from select lenders
Gold Loan Interest Rate Comparison (2025โ26)
| Lender | Interest Rate (p.a.) | Max LTV | Max Tenure | Processing Fee |
|---|---|---|---|---|
| SBI | 7.30% โ 7.80% | 75% | 36 months | 0.50% + GST |
| Bank of Baroda | 7.70% โ 9.20% | 75% | 12 months | 0.50% + GST |
| PNB | 7.50% โ 8.85% | 75% | 12 months | 0.70% + GST |
| Canara Bank | 7.65% โ 10.45% | 75% | 12 months | โน500 flat |
| HDFC Bank | 10.50% โ 16.50% | 75% | 24 months | 1% + GST |
| Muthoot Finance | 12% โ 26% | 75% | 12 months | Varies |
| Manappuram | 12% โ 26% | 75% | 12 months | 1% + GST |
| IIFL Finance | 11% โ 24% | 75% | 11 months | 1% โ 2% |
Note: Rates are indicative and subject to change. Always check the lender's website for current rates.
Documents Required
Mandatory
- Identity proof: Aadhaar card, PAN card, Voter ID, or Passport
- Address proof: Aadhaar, utility bill, or ration card
- Passport-size photographs (2)
- Gold items to be pledged
Additional (for some lenders)
- Signature verification
- Existing customer KYC (for bank customers)
How Gold Loan Works โ Step-by-Step
At a Bank Branch or NBFC Office
- Visit the branch with your gold and identity/address proof
- Gold assessment โ the lender's appraiser checks purity (karat) and weight
- Loan amount calculated โ based on assessed value ร LTV ratio (max 75%)
- Fill application form and submit KYC documents
- Loan sanction โ typically within 15โ30 minutes
- Disbursal โ amount credited to your bank account or given as demand draft
- Gold stored securely in the lender's vault/locker
Online Gold Loan (Select Lenders)
- Visit the lender's website or app (SBI YONO, HDFC, etc.)
- Apply online with basic details
- Schedule a branch visit for gold evaluation
- Complete KYC and documentation at branch
- Loan disbursed to your account
Repayment Options
| Option | How It Works |
|---|---|
| Regular EMI | Fixed monthly installments (principal + interest) |
| Bullet repayment | Pay entire principal + interest at end of tenure |
| Interest-only EMI | Pay monthly interest; principal at maturity |
| Partial release | Repay part of loan to release some gold items |
| Overdraft facility | Withdraw as needed; pay interest only on amount used |
Gold Loan vs Personal Loan
| Feature | Gold Loan | Personal Loan |
|---|---|---|
| Security | Secured (gold pledge) | Unsecured |
| Interest rate | 7% โ 17% | 10% โ 24% |
| Processing time | 15 min โ few hours | 1โ7 days |
| CIBIL required | Usually no | Yes (700+) |
| Income proof | Usually no | Yes |
| Max amount | Based on gold value | Based on income |
| Risk | Gold may be auctioned | Legal recovery |
Processing Time
- Gold assessment: 10โ15 minutes
- Application processing: 15โ30 minutes
- Disbursal: Same day (usually within 1 hour)
Important Tips
- Compare interest rates across multiple lenders โ PSU banks are cheapest but NBFCs are fastest
- Understand the LTV ratio โ RBI caps it at 75%, so โน1 lakh worth of gold gets max โน75,000 loan
- Keep track of repayment โ if you default, the lender can auction your gold after notice
- Negotiate processing fees โ many lenders waive fees for existing customers
- Check foreclosure charges โ some lenders charge penalties for early repayment; many banks don't
Frequently Asked Questions
What is the maximum gold loan I can get?
The maximum depends on the weight and purity of your gold. RBI mandates a maximum LTV of 75%, meaning you can borrow up to 75% of your gold's current market value. There is no upper cap on loan amount if you have sufficient gold.
Will my gold be safe with the lender?
Yes. Banks and regulated NBFCs store pledged gold in secure vaults with insurance. You receive an acknowledgement receipt with details of each item pledged.
Can I get a gold loan on gold coins?
Yes, most lenders accept gold coins up to 50 grams. However, coins must be from banks or government mints. Some lenders do not accept coins from private jewellers.
What happens if I can't repay?
The lender will send notices and give you time to repay. If you still default, the lender has the right to auction your pledged gold to recover the outstanding amount. Any surplus after recovery is returned to you.
Is gold loan interest tax deductible?
If you use a gold loan for business purposes, the interest is deductible as a business expense. If used for purchasing a house, it may qualify under Section 24. For personal use, no tax benefit is available.
Can I top up an existing gold loan?
Yes, many lenders offer top-up loans if your gold's market value has increased or you want to pledge additional gold. This is usually processed faster than a new loan.
Disclaimer: CitizenNest is an independent platform and is not affiliated with any bank, NBFC, or government body. Information provided is for educational purposes. Always verify current rates and terms directly with the lender before applying.
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