Gold loans are secured personal loans. It has a lower rate of interest than normal personal loans. The repayment tenure is flexible and you have multiple repayment options at your convenience. Your credit score is not important for getting a gold loan. Hence people wish to pledge their gold to get funds in case of emergency cash requirements.

Find the reasons why a gold loan is a smarter way to face an emergency cash crisis

Easy Eligibility Requirements

The important requirement for getting a gold loan is you must have pure gold that can fetch you a higher amount of loan. Even homemakers with limited sources of income can avail of gold loans. There is no minimum monthly income requirement as well. Other than these you will be required to satisfy other basic eligibility criteria within the age limit of 21 to 65 years. You will have to submit basic identity and address proof for getting a gold loan. Thus the eligibility, documentation, and approval process for a gold loan is very simple. 

Quick Approval And Disbursal

Some Non-Banking Financial Institutions offer digital gold loans within 30 minutes. Due to minimum eligibility requirements and documentation, you can get a gold loan maximum within the same business day of your application. In case of unforeseen medical emergencies, you are sure to get your required funds through a gold loan.

Low-Interest Rates

Normally a personal loan has a higher interest rate ranging from 10% to 18% depending upon your credit score and monthly income. However, gold loans are personal loans with a difference. The loans are secured with your gold savings. Hence the lender has a recourse to sell the pledged gold in case of any payment defaults. Personal loans are secured loans with low rates of interest.

Higher Loan To Value Ratio

You can get up to 75% of the market value of your gold as a gold loan as per the RBI mandate. If the market value of your gold is Rs 10 lakhs you can get a gold loan up to Rs 7.5 lakhs. Unlike a loan against property, there is no risk of undervaluing your security. You can capitalise on the gold rate fluctuations by pledging your gold when the prevailing market rate is higher. 

Easy And Flexible Repayment Options

The tenure of a gold loan can range between 1 and 5 years. The interest must be paid for the agreed loan tenure and the principal at the end of the tenure. You can also choose to repay your gold loan in Equated Monthly Instalments consisting of principal and interest payments. You can also repay the principal as a lump sum annual payment during the tenure. You can foreclose your gold loan before the loan period but ensure to check the foreclosure charges levied by your lender. The gold pledged by you can be recovered once the gold loan principal is repaid in full. But if you fail to pay your gold loan interest rate and principal as per the agreement, the lender can sell or auction your gold after sufficient intimation.

Eligibility Requirements For A Gold Loan

  • You must be a resident of India.
  • Age between 21 and 65 years.
  • You can be a salaried, self-employed, pensioner, or homemaker.
  • A good credit score will not be mandated as gold loans are secured by collateral.
  • The foremost requirement is that the gold must be pure.

Documentation Required For A Gold Loan

Proof of Address


Aadhar card, Passport, Ration card, Bank statements, NREGA card, Driving license

Proof of Identity

Aadhar card, Voter Identity card, PAN card, Driving licence.

Proof of Ownership

Lenders may require any documentary proof like purchase bills for proof of ownership of gold. Generally, this proof is taken on a self-declaration basis.

How To Apply For A Gold Loan?

Credit Mantri

  • Check the various gold loans available
  • Click on “Check Eligibility” after choosing the loan you want to apply for.
  • Enter the basic and other details in the application page and click “submit”. 
  • Enter the mobile OTP and understand your eligibility.


  • Choose the type of loan and the lender you wish to apply for.
  • Apply online at the official website of your preferred lender. 
  • Select the product you want to apply.
  • Provide basic details like Name, Age, Address, and Mobile Number
  • Submit the application form. The lender’s authorised representative will contact you for further processing.


You can submit the loan application at the lender’s branch physically and with the necessary supporting documents. The loan will be approved on satisfactory perusal of the application and documents. Some lenders offer doorstep banking services where the loan processing is done in the comfort of your home. You can avail of the service to get gold loans instantly.


When any financial emergency like medical, or education expenses strikes, a gold loan is the best option to get instant funds. You can choose a repayment plan that suits your cash flow. You are not burdened with fixed EMI commitments unlike any term loans or personal loans. Use your latent gold savings to generate cash flow in any emergency.

FAQ of Gold Loan : A smarter way to sail through an emergency cash crisis

1:What is the interest rate on gold loans?

The interest rate ranges from 7% to 16.5%.

2:What is the minimum monthly income to be eligible for a gold loan?

There is no minimum monthly income requirement for a gold loan. However, some lenders will do a basic check on your ability to repay the loan.

3:What are the processing charges on a gold loan?

The processing fees for a gold loan can range between 0.5% to 2% of the loan amount.

4:Do I need to submit proof of ownership of the gold?

No. It is not mandatory. The ownership is ensured on a self-declaration basis.

5:Will my gold be safely held by the financial institution?

The gold pledged with the financial institutions approved by RBI is safely held in a highly secured vault.