Gold Loan

How to Take A Gold Loan Against Your Ornaments


How to Use Your Jewellery to Secure a Gold Loan? Are there any benefits of taking out a gold loan against jewellery? Loan against gold: What is it? People frequently find themselves in precarious situations when they require money to cover an unexpected expense or to pay for a long-awaited need, such as a home renovation. A gold loan could be quite beneficial in these circumstances.

A gold loan is essentially a secured loan. In this borrowers use their gold jewellery or even gold coins as collateral to borrow money from a bank or non-banking financial institution (NBFC). The gold pledged as security may be obtained back by the borrower following full loan repayment.

The borrower’s credit history is not a major worry for lenders because gold loans are only offered in exchange for a piece of collateral. Gold loan’s biggest advantage is how straightforward it is to apply for one. A reputable lender’s website will allow prospective borrowers to complete the entire process online.

Loan Amount:

The loan amount is determined by the weight and purity of the gold that is pledged. The amount is inversely related to the gold market price at the time of pledging. The majority of lenders often do not accept ornaments with a purity of fewer than 18 carats for a gold loan. The loan-to-value (LTV) ratio is essential in gold loans. This ratio is the maximum amount that the lender will advance as a percentage of the value of the gold that the borrower has pledged, after assessing and verifying the purity of the gold loan against gold ornaments.

Therefore, if a person pledges gold jewellery worth Rs. 10 lakh and the lender offers a loan-to-value ratio of up to 60%, after which a maximum loan of Rs. 6 lakh is imposed. The maximum amount of a gold loan would increase to Rs 8 lakh, however, if another lender offered a loan-to-value ratio of 80%.

The Technique:

An application must first be completed, either online or at a lender branch. The majority of trustworthy lenders enable consumers to apply for gold loans online. Aadhaar cards, bank account numbers, and basic know-your-customer (KYC) credentials like Permanent Account Numbers are required of applicants. For application reasons, anything can be uploaded online, even photos. Officials from the lender get in touch with the applicant once the application is submitted to evaluate the gold that is being promised. Although this evaluation is physical, the majority of lenders will provide the borrower with the option of having it done at home. Otherwise, the applicant may go to the lender’s closest branch office.

This assessment is a brief procedure that frequently just takes a few minutes. The executives of the lender will assess the quality of the gold, its weight, and its current market value before determining how much can be loaned. The money is sent into the borrower’s bank account, typically within a day, while the promised gold is maintained with the lender.

What Kind of Gold can be Accepted as Collateral?

Gold coins, gold bars, and jewellery made of 18-to24-karat gold digital (but digital gold must be exchanged for physical gold against which a loan can be availed).

A few things to think about before taking out a gold loan include the following:

The convenience of gold loans is undeniable, but before applying for a loan, it’s crucial to evaluate gold loans and loan providers. Before you take out a loan, be sure to negotiate the best conditions and interest rates.

  1. Assess interest rates for gold loans against gold ornaments.
  2. Do your research to identify the best loan options.
  3. Determine which lender will provide the largest loan amount for the value of your gold.
  4. Consider the lender’s reputation.
  5. Examine the security precautions the lender has taken for the gold you have pledged.
  6. Evaluate how quickly various lenders disburse loans.
  7. Pick a lender with a solid customer support system and respect for the interests of its clients.

What Are Some Common Options for Gold Loan Repayment?

As a secured loan, gold loans are straightforward to apply for. The lender is confident that the loan won’t go south because the quality of the gold has been confirmed in advance. To make it convenient for the customer, they typically offer a variety of repayment choices.

1. Pay Interest as EMI and Principal Later: This option allows you to pay back the interest by the gold loan’s EMI schedule, but the borrowed principal must be completely repaid when the loan matures.

  1. Make Partial Payments: As necessary, make partial principal and interest payments. No matter the predetermined EMI plan, partial or full payment of both the interest and principal components is allowed. Your total interest payout will be lower if you pay off your principal first. Interest is typically calculated daily based on the amount of the loan that is still outstanding. By doing this, you can save a lot of serviceable interest.

3. Bullet Repayment: When the loan’s term is up, you must pay back the total principal plus interest using the bullet repayment method. With this repayment plan, interest is computed each month, but payment, along with principal repayment, is only required when the period is complete.

4. Regular EMI option: The regular EMI gold loan against jewellery is intended for those with steady monthly incomes in their bank accounts and is targeted at the salaried class. The EMI in this instance consists of principal and interest payments. It is also a quick process because this loan is only available to salaried individuals.


The purpose of this article is to give comprehensive information on gold loans against gold ornaments. You don’t even need to visit a branch to apply for a gold loan secured by gold jewellery.

To take a loan, go to its website, register, and fill in your key details, such as address and bank account details, and a company representative will come to your home to complete the process.

Competitive interest rates are offered on gold loans to assist you in getting money right away. The gold loan application and repayment procedures are also tailored to provide special features to accommodate all of your capital needs.

Also visit, Piramal Finance has more in-depth, educational-related articles.