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A Complete Guide to Gold Loans in India


Key Highlights

  • Gold loans in India offer flexible repayment options and affordable interest rates, making them a cost-effective solution.
  • The application process for gold loans, such as with Shriram Finance, is simpler with minimal documentation and quick disbursal of funds.
  • Gold loans can have a positive impact on credit scores by demonstrating responsible financial behaviour through timely repayment.
  • Loans against gold provide the advantage of keeping your gold assets secure while accessing funds for various purposes.

Life is full of surprises, and sometimes we find ourselves in need of money for unexpected expenses. When you don't have enough funds, taking out a loan can be a convenient solution. But have you ever thought about considering a gold loan? It might just be the answer you're looking for.

Gold loans in India come with a range of benefits that make them an attractive choice. Firstly, you can enjoy flexible repayment options. Additionally, gold loans offer affordable interest rates, making them a cost-effective solution. By using your gold as collateral, you can quickly access the funds you need while enjoying favourable terms and easy repayment.

Read on to find out how gold loans in India work and how they can help you manage your finances easily.

How Do Gold Loans in India Work?

To obtain a gold loan, you have to follow a systematic process that starts with finding a reputed loan provider. Search for online reviews, testimonials and read NBFC (Non-Banking Financial Companies) or bank sites to know which lender will suit you. It is advisable to do thorough research on lenders before opting to take out a loan from them. Once you have chosen a lender, follow these simple steps.

Gold Purity Evaluation

Take your gold to the preferred loan provider. The lender will examine your items and check their purity. Further, they’ll assess the amount of gold and the price per gram.

Remember that the items must be 18-22 carats to meet the gold loan eligibility criteria.

Eligibility Criteria Verification

Multiple factors come under thegold loan eligibility criteria, including age and yearly income. NBFCs, like Shriram Finance, make the process convenient for everyone.

Any Indian citizen between the ages of 18 and 75 can apply for these loans. This includes salaried employees, business owners, and self-employed individuals.

You need to submit the following documents along with your loan application:

  • Identity proof - PAN card, Aadhar card, driving licence, or passport.
  • Address proof - electricity bills, Aadhar card, rental agreement, gas bill, driver’s licence, voter ID, phone bills, or water bills
  • Bank documents – last three months’ bank statements or copy of passbook page with bank name, account number, IFSC, and branch name
  • Recent passport-size coloured photographs.

For most providers, submitting your PAN card is mandatory for identity verification. If you do not have a PAN card, submitting Form 60 might work.

Loan Sanctioning

If you supply all the necessary documents and meet all gold loan eligibility criteria, the bank or NBFC will approve your loan amount. Then, the lender will create an agreement containing the loan terms.  Based on these factors, you will receive your loan amount, which is a percentage of the jewellery's worth. Companies like Shriram Finance offer loans up to 75% of your gold’s value. 


Gold loan repayment is the final step, ensuring a smooth conclusion to the process. Choose from flexible repayment options, including monthly instalments or a lump sum payment. As you fulfil your obligations, your pledged gold is returned, maintaining its value.

Advantages of Choosing a Gold Loan

The primary advantage of gold loans in India is the ease of obtaining funds quickly by using gold jewellery or ornaments as collateral. This allows individuals to access funds for various purposes without the need for extensive documentation or credit checks. Othergold loan benefitsinclude the following.

Affordable Interest Rates

Gold loans have cost-effective interest rates. At Shriram Finance, you will receive loans starting at 11.5% p.a.* Also, receive the benefit of swift loan disbursal after your application is approved.

Note: You can check out the onlinegold loanEMI calculator to figure out your interest payments within seconds.

Minimal Documentation

Gold loan benefitsalso include simple documentation, a big relief for most loan seekers. When you urgently require money, a loan with easy paperwork comes as a boon.

Many companies, like Shriram Finance, conduct the loan application process digitally, reducing the paperwork. You just have to submit your KYC documents for loan approval. No income proof is required, as you're already pledging a collateral.

The documents required by Shriram Finance include -

  • Identity proof
  • Address proof
  • Photographs
  • Bank documents

Apply for a gold loan with Shriram Finance now for a hassle-free process and quick disbursal of the loan amount.

Flexible Repayment Tenures

In general, gold loans have convenient and well-structured repayment policies. Shriram Finance offers a flexiblegold loan repaymenttenure ranging from 1 to 12 months. Additionally, you can plan your repayment using the EMI calculator.

Positive impact on your credit score

Gold loans can have a positive impact on your credit scores. By timely repaying the loan, borrowers demonstrate responsible financial behaviour, which can improve their creditworthiness. This can enhance their credit profile and potentially lead to better loan terms and interest rates in the future.

Protect Your Gold Assets

Applying for these loans also lets you keep your collateral safe. Along with the mentioned benefits, your provider will secure the gold at their premises. This can be an excellent strategy if you don't have the proper resources to keep your gold in a secure space.

How to Apply for Gold Loan?

If you want to apply for agold loan, you'll have two options- online or offline application.

For the offline application process, visit the nearest office of the loan provider and submit your gold jewellery as collateral. Understand the agreement and follow their regulations to receive the loan amount.

However, the online application process is more convenient and preferred. For this, visit the provider's website and check thegold loan eligibility criteria. Then, determine the necessary documents for the application.

Here are the most common steps involved in the process

  • Create an account and register on the website using your phone number
  • Receive a verification call from the provider
  • Discuss the terms and conditions, such as payment tenures, interest rate, etc.
  • Visit the provider's office with your gold
  • Conclude the purity check and document verification process
  • Receive the approved amount

These rules are also applicable when youapply for gold loanat Shriram Finance.

The Bottom Line

Gold loans can be ideal for financing sudden cash-crunch situations, as you get the amount quickly. You just need gold worth 18-24 carats and the necessary documents to get started.

To receive comprehensive loan facilities, apply forgold loan from Shriram Finance. Get affordable interest rates starting at 11.5% p.a.*, quick disbursals, flexible tenures, and up to 75% of the gold’s worth as a loan.


  1. What if I am unable to pay the loan amount?

If you're unable to repay the loan, the lender might sell your collateral through a public auction to collect the outstanding amount. However, the lender must notify you at least two weeks before the auction.

  1. Can a gold loan affect credit score?

Yes, gold loans affect credit scores. When you repay instalments on time, your credit score improves.

  1. Can I get a loan approved without a fixed income?

Yes, you can get a gold loanwithout a fixed income, as you’re pledging the gold as the asset or collateral.

  1. How will the loan provider calculate my loan EMI?

Gold loan providers calculate the EMI considering your required loan amount, rate of interest and tenure. You can also check your EMI using online EMI calculators.

  1. What if my gold collateral’s value increases during the tenure?

If the value of your gold collateral increases during the loan tenure, it usually doesn't affect the existing loan terms. However, some lenders may provide the option to revalue the gold periodically and adjust the loan amount. Contact your lender for specific policies regarding revaluation and its potential impact on your loan.

Get a gold loan at low interest rates