A gold loan is also known as a secured loan as one offers gold coins or gold jewellery as security against the loan. Gold loans are offered by a number of banks and Non-Banking Financial Companies (NBFCs).


1 Walk into your nearest lender’s branch with the gold coins or gold jewellery that you want to pledge for the gold loan

2 Fill in the gold loan application form and turn in the gold

3 The gold is then assessed and about 60% to 75% of the gold’s market value is released as the loan amount

4 You then repay the loan in monthly instalments 

5 The gold is kept safely and given back to the customer once the loan is repaid in full


1 Low interest rates –Interest rates begin at 9.95% and can go up to 16% depending on the credit profile of the individual. 

2 Instant money –You can walk into any branch with the gold coins or jewellery and walk out with the money in under 2 hours as banks are happy to disburse funds for a secured loan. It can happen across the counter itself. 

3 Minimal documentation – There is very minimal documentation needed for a gold loan; documents required are generally Aadhar card and PAN card.  

4 No income proof needed – As gold loans are secured loans, you do not need to provide the bank with any proof of income. This is a very big benefit for unemployed individuals who are in urgent need for funds. 

5 Credit score not needed – Individuals with a bad credit score can get a gold loan. As the gold is used as collateral, the lenders are not bothered about the credit score or credit history of the individual.

6 Safety – The gold is kept very safely in vaults at the bank. Once the loan in repaid in full, the gold is given back to the customer safely.  


1 Gold can get sold – In case one defaults on payments or cannot repay the loan in full, the lender has the rights to sell the gold and settle the loan amount. This can be a big loss for the customer.

2 Short tenure – Gold loans generally have a short tenure that range from 3 months to only 1 year. Some banks provide gold loans up to 4 years maximum. 

3 Gold value – Only 60% to 75% of the gold’s market value is given to the customer as the loan amount for the gold loan. 

4 Volatile prices – Since the price of gold fluctuates in the market, there are chances the customer may get a lower loan amount for the gold he gives as security. 

To apply for a gold loan, click here.