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Gold Loan/Swarna Loan

A loan which can be taken against Gold is Gold Loan. This Gold loan is a secure loan in which the person or a customer is going to take this loan against gold ornaments in India. This will be kept in gold loan companies/ banks where in return they will give you the loan amount. That amount will depend upon the present market value of the gold. 

These secured gold loans, where the jewelry of the customer is deposited as security for guarantee. In this procedure you are going to give your gold jewelry to the lender from where you are getting the loan. When you complete the repayment of the loan again you will get back your Gold which you have kept for collateral at the bank. You can take this gold loan from private banks, nationalized banks and also many other financial institutes also provide you these gold loans with the best interest rates.

It is always suggested to go for a gold loan than for a personal loan. Compared to the personal loan, taking a gold loan is the better option depending on the observations. In taking this gold loan you will get the value of the gold up to 60%. With the tenure of five year you have to apply for the gold loan in which interest rate charges will be 9.90 percent per annum.

Gold Loan Features

1. Get quicker loan disbursal than other loan products

2. World-class Safety Protocols: Assured safety of your gold ornaments with strong rooms featuring world-class security protocols, for your peace of mind.

3. Get cash immediately to solve any kind of emergencies

4. There is no fixed margins in gold loan 

5. Expect quicker customer response and service.

6. Lowest processing fee 

8. Apply online gold loan and get disbursed within a few hours

Gold Loan Benefits

In case you are planning to take a loan, one of the better options that you can consider is gold loan, which is a much better proposition, when compared to loans like a personal loan. The benefits of taking a gold Loan are multifold :

  • High Loan Value: Loan up to Rs. 20 lakh, to fulfil all your financial requirements.

  • Accurate Evaluation: In-house evaluation of your gold with a carat meter, for additional security of your assets.

  • No hidden charges 

  • Low interest rates 

  • Flexibility in repayment: Wide range of repayment options, to make the loan more affordable for you.

  • Part-prepayment and Foreclosure Facility: No charges on part-prepayment or foreclosure to make the loan affordable

  • Part release facility: Facility to withdraw some of your gold ornaments, in case you need them. Get a loan against your gold for your urgent financial needs, from weddings to medical emergencies.

  • No charges for gold security 

  • Doorstep service to process the loan

Gold Loan Fee and Charges

To apply for a gold loan, you have to pay fees and charges applied by the Bank. It covers all charges and fees made by a bank to their customers.The following charges are taken from the Bank is joining fee, annual fee, interest rate, late payments charges etc.



Interest Rate 

9.90% per annum

Processing fee 

Upto 25 of the loan amount

Part payment  Charges 


Foreclosure Charges 


Penal Interest

3% (inclusive of taxes)

Tenure period 

4 years 

Loan Amount

Rs.10000 to Rs.50 lakh 

Loan Against Gold Eligibility Criteria

There are some eligibility criteria required to apply for the gold loan. One who is going to apply for the gold loans has to reach these minimum eligibility requirements as follows.

1. At the time of applying for a loan the minimum age of the customer is 18 years and maximum age of the customer is 75 years.

2. Salaried, self employed, businessmen. Housewives, retired officials are eligible to get a gold loan.

3. No minimum income required

Required Documents for Gold Loan

The applicant is required to provide the duly filled application form of the financial institution along with the signature and passport size photograph. Apart from this, the applicant is required to provide the following paperwork to avail the gold loan.

1. Filled application form

2. 2 passport size photographs

3. Identity proof

4. Address proof

5. Signature proof

6. Form 16 or PAN Card

7. Age proof

8. Post loan disbursement documents (if any)

Why to take a gold loan?

1. Fast disbursal of few hours to 1-2 days

2. No requirements of CIBIL score or income proof

3. CIBIL score can be improved or created

4. Highly flexible repayment terms 

Gold Loan Options for the repayment

1. You can repay the loan in the form of EMI

2. You can pay the interest first and the principal amount after the completion of loan tenure

3. You can also pay interest on a monthly basis and the principal amount at the end of the tenure

Gold Loan Don'ts while applying

Indians’ affinity for gold is known to the world. It is one of the largest importers of gold. In India, gold is usually kept in the form of jewellery. Indians not only buy them as an ornament but also as an investment, which they can use anytime to fund their urgent cash requirements. Whether there is a medical emergency, business expansion or any other financial liabilities, gold can be used to get loans against it.

1. Not checking creditor’s credibility

A gold loan is a secured loan, which implies that it is protected by collateral (gold in this case). This collateral remains with the creditor or lender till the loan amount is completely paid off. 

2. Not comparing your options

Everyone wants to bag the best gold loan deal. There is no fixed formula to get one as it depends on the borrowers’ requirements. However, one can make sure that they compare all options before signing the dotted line.

3. Not considering the repayment structure

When considering a loan offer, customers should always talk about the repayment structure with their creditors. Understanding loan repayment terms will help them plan their finances in advance and avoid defaults.

4. Avoiding LTV Calculation:

LTV is an abbreviation for Loan-to-Value Ratio. This term is used by creditors to express the ratio of a loan to the net worth of an asset. Creditors use this ratio for risk assessment. Higher the LTV, higher will be the risk involved. To get the maximum amount from creditors, borrowers must consider the LTV ratio also.

5. Being unaware of the quality of gold that qualifies for loan: 

When pledging gold ornaments, ensure that it qualifies the minimum purity criteria. Creditors approve loans only on gold objects that exhibit the purity of 18 – 22 carat or above. 

Gold Loan Do's while applying

1. Compare rates and rules. Not all lenders offer the same product features. So pick a lender who offers you the best rate and features or you could end up paying more interest.

2. Check if the lender is credible. Since you are entrusting them with your gold, opt for reputed lenders. Do not take gold loans from lenders who have bad reviews.

3. Consider the extra cost because of processing and other charges, especially if you opt for flexible repayment options. They could end up costing more.

Compare other Bank Gold Loan Interest Rates


Interest Rate

AXIS Bank Gold Loan

14.50% to 17%

HDFC Bank Gold loan

11% to 16%

Kotak Mahindra Bank Gold Loan

10.50% to 17%

Yes Bank Gold Loan

11.25% to 16.25%

ICICI Bank Gold Loan

10.00% to 19.76%

RBL Bank Gold Loan

Starting at 10.75%

IndusInd Bank Gold Loan

10.50% to 16.00%

Canara Bank Gold Loan

Starting at 13%

Punjab National Bank Gold Loan

10.05% to 11.05%

Gold Loan EMI and How to Calculate

You can calculate the gold loan interest by subtracting the principal amount from the total amount to be paid. The total amount you would pay by the end of tenure can be calculated with the help of an EMI calculator.The following formula is used to calculate EMI of Gold Loan :

E = P* r* (1+r)^n / ((1+r)^n – 1)


E = EMI (Equated Monthly Installment)

P = Principal Loan Amount

r = Monthly Interest Rate

n = Monthly Loan Tenure

How to apply for Gold Loan

There are two ways to apply for gold loan thai is :

1. Offline Method : By visiting nearest bank branch

2. Online method : You can apply online for gold loan through 3 easy steps :

  • Fill up the loan application form

  • Complete the KYC process at the comfort of your home

  • Loan amount transferred directly  to your bank account

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FAQ On Gold Loan

1. What is a gold loan?

A loan which can be taken against Gold is Gold Loan. This Gold loan is a secure loan in which the person or a customer is going to take this loan against gold ornaments.

2. Who is eligible to get a gold loan?

You can apply for a gold loan if you are a trader, businessman, salaried employee or self-employed or a farmer.

3. How to apply for a gold loan?

You can apply online and offline both for a gold loan.

4. How long does it take to complete the gold loan approval process?

The loan approval process for gold loan is very fast. If your application meets all the requirements, it takes just an hour for the loan amount to be disbursed.

5. How much processing fee is charged for a gold loan?

The processing fee charged for a gold loan is upto 2% of the loan amount.

6. Which formula is used to calculate EMI for a gold loan?

The following formula is used to calculate EMI for a gold loan is E = P* r* (1+r)^n / ((1+r)^n – 1)

Where, E = EMI (Equated Monthly Installment), P = Principal Loan Amount, r = Monthly Interest Rate, n = Monthly Loan Tenure

7. How much age is required to get a gold loan?

The minimum age of the customer is 18 years and maximum age of the customer is 75 years to get a gold loan.

8. Is there any part payment and foreclosure charges apply to get a gold loan?

Nil part payment and foreclosure charges are applied to get a gold loan.

9. What medium should I use to repay the loan?

The loan can be repaid by choosing any medium of money transfer as you desire, such as Cash, Cheque, Demand Draft or Online Fund Transfer

10. What documents are required for approval of your gold loan?

Documents required for approval of your gold loan are:

  • Id proof, such as your Driving License, Pan Card, Form 60/61, Passport, and Voter ID card.

  • Address proof, such as House Registration Documents, and Utility Bills

Last Updated on : 24/Nov/2020

Know More About

Gold Loans

You're eligible for a Gold Loans if you:

Are legally adult enough to handle it

Have still got it

Get a regular pay check

Make more than a basic buck

Your eligibility depends on:

Earn more than minimum income required

Maximum allowed Gold Loans is Rs. 10K to Rs. 45 lakhs

EMIs of other loans loweryour eligibility

Boost your eligibility by:

Pay off your credit card bills

Choose longer tenure loan up to 5 years

Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:

  • 1. Photo ID and age proof
  • 2. Signed application form with photograph
  • 3. Residence proof
  • 4. Last 6 months bank statement
  • 5. Documentation for salaried applicants:
    • Last 3 months salary - slips
    • Form 16 or Income Tax Returns
  • 6. Documentation for self-employed applicants:
    • Last 3 years Income Tax Returns with computation of Income
    • Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

Gold Loans Interest Rates

Updated on 25 Nov 2017

Gold Loans Details
Interest Rate (Monthly reducing balance) 14.5% - 17%
Processing Fees Varies with bank
Loan Tenure 1 year to years
Pre-closure Charges Varies with bank
Guarantor Requirement Varies with bank

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