Is PAN Card Mandatory While Taking Gold Loan?


India is one of the world’s biggest buyers of gold. The valuable metal can also be used to get a loan in a cash crunch. Getting a gold loan is one of the fastest ways to get cash when you need it most. A low credit score will not cause any issues, if you have gold bullion or jewelry, you will get a gold loan easily.

You do not necessarily need a PAN card to get a gold loan, but you will need some other paperwork. Continue reading to learn more about these documents and what to keep in mind when applying for a gold loan.

What Is a Gold Loan?

Gold loans, often known as “loans against gold,” are secured loans in exchange for this precious metal owned by the borrower. Lenders will typically allow you to borrow up to 80% of the gold’s value. After the loan repayment, you will get your gold back.

Gold loans, in contrast to other secured loans like mortgages and auto loans, have no limitations on how the money can be used. As a result, it is a good solution to fulfil your urgent money needs, whether for a marriage, a family trip, or your child’s college. Also, many private and national banks and NBFCs give the best gold loans with low interest rates.

How Exactly Do Gold Loans Operate? 

Gold loans are easy to understand for anyone. For a gold loan, the borrower has to give the lender gold in the form of coins or jewelry. You can borrow up to 75% of the value of the pledged gold products. 

gold loan can be taken out by an Indian citizen who owns items made of gold. When you give the gold to the lender, an assessor will look it over to ensure it is of good quality and worth what it is selling for now. Once you agree to the loan amount and any fees, you can start filling out the paperwork. 

After agreeing to give you a loan, the lender will keep the gold and transfer the money to your bank account. During the repayment process, the full amount of the loan plus interest should be paid back. 

Gold will not likely lose much value or go down in price. Gold’s value is guaranteed to go up over time, unlike the value of other assets that can be used as security. This encourages lenders to offer money against gold.

What Documents Are Needed in India to Get a Gold Loan?

It is not necessary to have a PAN card to get the best gold loan. But the following documents must be present: 

  • An Aadhar card, a driver’s license, a voter’s ID card, or a duplicate of a passport may be used as identification.
  • Landline/postpaid bills, water bills, electricity bills, or rent agreements (together with the most recent owner’s electrical bill) are all acceptable forms of identification as proof of residency.
  • A pair of current passport-sized pictures

Interest Rates on Gold Loans

Gold loan interest rates range from 7% to 18%. The main factors that affect the interest rate are the size of the loan and the borrower’s monthly income. The gold loan interest rate will be higher if you borrow more money. Likewise, the interest rate will be lower if you have a stable, high income.

 The loan’s value is directly linked to how much gold you have. The purity of the gold doesn’t make a big difference in the interest rate. If you pay off the loan well before the pre-scheduled payback term of 3-6 months, certain NBFCs and banks may assess a foreclosure cost of up to 2%, excluding GST. A minimum service charge of Rs. 500, or 0.5% to 2% of the loan amount, is further charged.

Eligibility Criteria to Apply for a Gold Loan

Most people are qualified to obtain a loan against their jewelry, and the method is simple. But, there are some basic eligibility needs. These are given below:

  • You must be at least 18 years old to meet the eligibility criteria for a gold loan.
  • Your source of income must be stable. 

The Process to Apply for a Gold Loan

Online or offline applications are accepted for gold loans. You must go to your nearby branch to submit an offline loan against a gold application. You may follow the steps listed below to apply for a gold loan online:

  • First, go to the website.
  • Select “Gold Loan” from the list of options under “Apply Now.”
  • Complete the online gold loan application by providing your name, contact information (including an email address), and residence address.
  • Choose your state, city, and closest branch in the fourth step.
  • To submit your gold loan application, click “Submit.”
  • Write down the number on your reference ID. A representative from the company will contact you soon.

Benefits of a Gold Loan

When taken out from reputable companies, the best gold loans offer a wide range of benefits to the borrower. Some of the benefits of a gold loan are as follows:

  • Little paperwork is needed since your gold will be collateral for the loan. Identity and address documents must be provided.
  • No proof of income is needed.
  • You can pay the principal balance in full or only the interest after the loan period.
  • You might save a lot since gold loans offer lower interest rates than personal loans.
  • gold loan has benefits such as fast processing and rapid distribution of borrowed funds.
  • Loans secured by gold may easily be converted to cash.
  • This loan has security. Therefore, having a poor credit history won’t prevent you from acquiring a loan.
  • Gold loans have either zero or extremely low processing fees.


With so many benefits, a gold loan is among the finest ways to handle any unforeseen financial circumstances. You can still apply for a gold loan without a PAN card. You must submit a few additional documents to prove your identity and address. Many banks and financial institutions offer instant gold loans after a quick and simple verification process. 

For more information, you can visit the Piramal Finance website and explore their products and services.