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How to take a gold loan?

How to take a gold loan?
Gold loans are extremely easy to avail with minimal documentation and speedy approvals. You can avail of gold loans from specialised gold loan finance companies like Muthoot Finance and Manappuram Finance. Besides, a host of other banks also provide loans against gold as a collateral.

Gold loans are a little different from personal loans, in the sense that personal loans are given on the basis of one's credit worthiness, while gold loans are given on the basis of gold as a collateral.

Who can take a gold loan? What are the documents needed?

It's possible that anyone who has gold and jewelry can avail a loan. It's important to note that gold will be sanctioned after determining the value of your gold, less the weight of stones and other non-gold items on the jewelry.

Normally, the person who avails a gold loan has to to provide proof of residence and identity proof.

What is the interest rate?

Normally, the interest rate could range from 12 per cent to 24 per cent. Some gold loan finance companies offer a base rate of 12 per cent.


Gold loans are generally availed for emergencies and hence come with a short tenure of upto one year. However, it can be extended every year. The bank or gold loan finance company will give you loan based on guidelines and loan to value. For example, if your jewelry is valued at Rs 1 lakh, it's possible that you would get a loan of only about Rs 60,000.

How do you service the loan?

Some gold loan companies allow you to service the loan every month and repay the principle at the end of the tenure. You can take the loan for one month to one year.

Worry about ornaments?

Most of the banks and companies take utmost care not to damage the ornaments during evaluation or storage. However, this is always a risk.


Gold loans are clearly favourite amongst all the other type of loans as they are easy and quick to avail and can be sanctioned in a few minutes. They are extremely handy during times of emergency.

Read more about: gold gold loan
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