Personal Loan

How To Use Personal Loan Amount To Purchase Jewellery In Festive Season


Purchasing gold jewellery for use as ornaments, loan collateral, or long-term investments is common in India. In fact, buying jewellery is a tradition during weddings or festivals like Dhanteras and Diwali.

If you, too, are interested in buying jewellery this festive season, you may be considering a festive loan to get the required amount.

However, buying jewellery with borrowed money is not always financially viable. Moreover, lending institutions do not offer personal loans specifically for buying jewellery. And you must understand the genuine process before proceeding. 

So, this blog will help you weigh the pros and cons and cover the correct process of buying jewellery with personal loans. This will help you make an informed decision. Let’s begin!

What is a personal loan for jewellery in India?

A festive loan for jewellery is not directly available in India. The RBI prohibits banks from giving personal loans specifically for buying jewellery.

However, most lending institutions offer personal loans for all personal purposes, including purchasing jewellery.

Since you deal with the lending bank or NBFC, you are free to legally use the amount of a personal loan for jewellery purchases unless that lender disallows it.

So, you can indirectly get a personal loan from most lenders for jewellery purchases in India.

Should you buy jewellery with borrowed money?

The sales of gold have increased in India after a dip due to COVID-19. However, buying gold using a borrowed amount is not always wise. So, here are the pros and cons of using a personal festive loan for jewellery purchases.


  • You have high flexibility of purpose with a personal loan.

You can often get personal loans for any purpose. This includes jewellery purchases from a lender without specifying a reason to the lender. So, you can quickly get funds for education, travel, marriage, jewellery, or buying gold.

  • No need for collateral.

Loans for personal use are provided without the need for collateral. This makes personal loans an attractive option to fund jewellery purchases.

  • Minimal documentation is required.

Lenders require only a few documents for personal loans for any purpose. These include your photo ID proof, income proof, address proof, and a copy of your salary slips.

  • There are flexible repayment options.

Personal loans are flexible and allow you to choose your repayment tenure or structure. This allows you to pay back even large amounts required in jewellery purchases easily.

  • Gold jewellery is likely to get good returns in the long run.

High-quality, hallmarked gold jewellery or coins will likely bring large profits when sold strategically. This makes it a wise investment for the long run that is worth an affordable loan.


  • Gold jewellery is not a stable investment in the short run.

The price of gold can fluctuate significantly in the short run, and you should not consider it a reliable short-term investment. It may not bring you enough returns on sale to meet the debt it causes if you lose income unexpectedly.

  • Jewellery is a large investment and involves large debt.

You may need a large personal loan for jewellery as gold jewellery is costly. And personal loans usually have high-interest rates. This can make a jewellery purchase with loans financially unviable. Strategic buying with expert advice can resolve this issue.

  • It is tough to get large personal loans if your credit score is low.

Getting large personal loans for jewellery or other purposes is difficult unless you have a good credit history. You may need to clear other debts, improve your stable income, and build a good record using a credit card first.

How to use a personal loan in India to buy jewellery?

We have seen that purchasing gold with personal loans is beneficial under the right conditions. If you are ready to begin, here is the process of getting a personal loan in India-

Step 1: Determine your requirement

Find out the details of the personal festive loans available and compare them with the price of your desired jewellery and existing funds. This will help you judge the financial viability of a particular loan amount. Using EMI calculators, you should check the lock-in period, interest rates, and monthly instalments.

Step 2: Check loan eligibility

You must also check whether you are eligible for the desired amount by using an online Eligibility Calculator. You may also take measures to improve your credit score, making you eligible for higher amounts. You may need to revise your desired jewellery amount based on your eligibility and ability to pay the instalments.

Step 3: Approach the bank

You can apply for a personal loan via NetBanking, the website, or by visiting a branch. You will have to fill in the required details and submit the form.

Step 4: Submit documents

Next, you should find the required documents and submit them as requested. You will usually need copies of your income, address, and ID proof. The lender sanctions the loan after processing. And you can then use it for various purposes, including buying your favourite jewellery!

Remember to buy from a reputed jeweller with a Bureau of Indian Standards license and check for the hallmark to ensure the gold is authentic. Moreover, you must always pay the loan instalments timely to avoid a damaged credit score.

Summing up

Using the amounts of festive loans for jewellery purchases can help you buy and use jewellery as a profitable long-term investment. But wrong decisions made without proper guidance can land you in financial trouble.

Hence, you must consult legal experts and trusted financial agencies like Piramal Finance to get the correct guidance and favourable loans. These measures will help you buy high-quality jewellery strategically for maximum returns.