A gold loan is one of the simplest ways to borrow money in India. You pledge your gold jewellery or ornaments with a lender, the lender assesses its value, and disburses a loan based on that.
A secured loan against gold does not require salary slips or a Credit Information Bureau (India) Limited (CIBIL) score check. Once you repay the loan, your gold is returned to you.
Key Highlights
- A gold loan is a secured loan — your gold jewellery acts as collateral.
- No income proof or CIBIL score required for a gold loan in India.
- Shriram Gold Loan offers up to 80%* Loan-to-Value (LTV) for consumption needs
- You can foreclose your Shriram Gold Loan anytime; no foreclosure charges apply.
When Is a Gold Loan Most Suitable?
Most consumer loans ask a lot of you upfront. For example, to get a personal loan, you need to provide your salary slips, bank statements, and a good credit score. A business loan asks for audited accounts. Even a credit card requires a formal credit history.
For most gold loan applications, your income and credit history do not factor into the decision. The security you are offering is physical collateral/asset (in the form of gold jewellery). The lender's risk is covered by your jewellery, which means your income, job, or credit history simply do not factor in.
For a homemaker, a farmer, a small trader, or anyone whose earnings are irregular or undocumented, this makes a gold loan genuinely accessible in a way most other credit products are not.
Pls note that under the RBI's new framework effective April 1, 2026; borrowers getting a gold loan above ₹2.5 lakh may still have to go through some form of credit appraisal.
Gold Loan vs Personal Loan: A Comparison
When you need funds urgently, you will likely compare a gold loan with a personal loan. A gold loan works better when you need money quickly, have no formal income record, or want to avoid high interest costs. A personal loan may suit you better if you need a longer repayment window or do not want to pledge an asset.
Here is how they differ on the factors that matter most:
*Under the new RBI framework, loans above ₹2.5 lakh may may require a credit score.
*Shriram Gold Loan can be closed anytime during the loan tenure. Nil or zero foreclosure charges apply.
Step-by-Step: How the Gold Loan Process Works
Step 1: Visit a branch with your gold
Choose a lender and take your jewellery for pledging to the nearest branch. An executive will check the purity of your gold using a karatmeter right in front of you. It is a quick process.
Step 2: Assessment and valuation
The executive weighs the jewellery, then sets aside the weight of any stones or non-gold elements. What remains is your net gold weight. Purity matters, and gold between 18K and 22K is accepted, and the valuation is based on the current market reference price. Once done, you get a valuation certificate.
Step 3: Loan amount
How much you can borrow depends on your gold's assessed value. Lenders use the Loan-to-Value (LTV) ratio to work this out.
Note: As per the new framework laid down by the Reserve Bank of India (RBI), effective April 1, 2026, gold loan LTV is based on a tiered structure: Up to ₹2.5 Lakh - 85% LTV; ₹2.5–5 Lakh - 80% LTV; above ₹5 Lakh - 75% LTV.
Currently, Shriram Gold Loan offers up to 80% LTV. The applicable LTV is subject to Shriram Finance's assessment.
Say your gold is assessed at ₹1,00,000 — you could get up to ₹80,000*.
Step 4: Documentation
Keep your Aadhaar and PAN card handy. That is all the paperwork you need. You sign the loan agreement, repayment terms are laid out.
Step 5: Disbursal
The money is credited to your bank account — in most cases, on the same day. Your gold moves into secure custody at the branch from this point on.
Step 6: Repayment and gold return
Pay back the loan — whether through monthly EMIs, a bullet payment, or quarterly instalments — and your jewellery comes back to you once the full amount is cleared.
To know more on gold loan repayment methods, read 5 easy methods to repay your gold loan.
Use the Shriram Gold Loan EMI Calculator to estimate how much you can get against your gold.
Gold Loan Eligibility — Who Can Apply?
A gold loan has among the simplest eligibility requirements of any loan in India. Here is what you need to qualify:
- Age: You must be between 18 and 70 years old.
- Residency: Indian residents only (Non-Resident Indians/NRIs are not eligible).
- Gold purity: Jewellery must be between 18K and 22K purity. Gold below 18K purity is not accepted.
- Documents: A valid Aadhaar card and Permanent Account Number (PAN) card are sufficient. No salary slips, bank statements, or income tax returns are required.
- Ownership: The gold you pledge should belong to you or your immediate family.
There is no minimum income requirement and no credit score check for most gold loan applications.
What Type of Gold Is Accepted?
- Only gold jewellery and ornaments between 18K and 22K purity are accepted.
- Gold coins issued by banks may be accepted in limited cases, so please confirm eligibility at your branch.
- Gold bars and bullion are not accepted as collateral for consumption loans under RBI guidelines.
- Diamonds, gemstones, and stones embedded in the jewellery are excluded from the weight calculation — only the actual gold weight is counted.
What Can You Use the Loan Amount for?
There are no restrictions on end-use of a loan against gold in India. Medical emergencies, school or college fees, home repairs, business working capital, a wedding expense, an agricultural input — all of these are valid and common reasons people take a gold loan.
This flexibility is one of the reasons gold loans work well across different life situations. You are not applying for a specific-purpose loan with usage conditions attached — the funds are yours to use as needed.
Also read: How to apply for a Shriram Gold Loan — a step-by-step guide
Gold Loan Interest Rates and Tenure: What to Expect
Shriram Gold Loan interest rates start at 10%* per annum (p.a.). The rate applicable to you depends on factors such as the loan amount, tenure, and your gold's assessed value.
With a tenure of 1 to 12 months*, Shriram Gold Loan offers most borrowers flexibility to use it as a short-term credit bridge — for a medical expense, a school fee deadline, or a working capital gap — and close it once their situation stabilises.
Unlike personal loans, which can carry significantly higher rates for borrowers with no formal credit history, a gold loan is secured — which generally keeps interest costs lower.
Interest rates are subject to change. Please visit shriramfinance.in or contact your nearest Shriram Finance branch for the rate applicable to your loan.
Early Repayment and Foreclosure: What You Need to Know
Shriram Gold Loan can be foreclosed any time; no prepayment or foreclosure charges apply. If you get the money you needed and your situation improves faster than expected, you can close the loan early, pay only the interest for the days it was active, and take your gold back.
How is Your Pledged Gold Stored and Protected?
Your gold is stored at the branch in a locked vault throughout the loan tenure. You do not lose ownership — the gold remains yours. The lender only has a right over it if the loan goes into default and remains unpaid.
Ready to get a gold loan? Locate your nearest Shriram Finance branch, and walk in with your gold and valid KYC documents.
Apply online for Shriram Gold Loan and schedule a branch visit.
FAQs
What is a gold loan in simple terms?
A gold loan is a secured loan where you pledge your gold jewellery with a lender and receive money against its value. You keep ownership of the gold, and it is returned to you once the loan is fully repaid. No income proof or credit score is needed.
How much loan can I get against my gold?
Shriram Gold Loan offers up to 80%* of the assessed value of your gold for consumption purposes. So, if your jewellery is assessed at ₹1,00,000, you can borrow up to ₹80,000*. Always check with your lender on LTV policy since the actual amount depends on the purity, weight, and current market reference price of your gold.
What documents are needed for a gold loan?
You need basic KYC documents, an Aadhaar card and a PAN card. Income proof, salary slips, or bank statements are not required.
Can I close my gold loan before the tenure ends?
Shriram Gold Loan can be foreclosed any time during your loan tenure with nil foreclosure charges.
What happens if I cannot repay the gold loan?
If the loan remains unpaid beyond the tenure, your lender has the right to auction your pledged gold to recover the outstanding amount. You will receive advance notice before any auction is initiated. To avoid this, contact the branch if you are facing repayment difficulty — tenure extension or restructuring may be possible.