A gold loan is a secured loan against gold or a loan against gold ornaments, and it is one of the oldest and most practical forms of credit in India. You walk in with gold jewellery, the lender assesses its weight and purity, and you walk out with funds. The gold sits safely in the lender's vault until you repay.
You retain ownership of your gold throughout the loan tenure. Once you repay the loan in full, your get your gold back.
Gold loans are one of the fastest ways to access funds in India, particularly for people who need money quickly and don't want to go through lengthy income verification processes. Since the loan is secured by the gold itself, income proof is not mandated.
Key Highlights
- A gold loan is a secured loan against gold — your credit score and income are not primary eligibility factors.
- Gold jewellery between 18 and 22 karat purity is typically accepted; the purer and heavier the gold, the higher the loan amount.
- The application process can be completed online or at a branch — with funds disbursed the same day in most cases.
- Repayment options include EMIs, interest-only payments, and bullet repayment — you can choose what fits your cash flow.
Who Is Eligible for a Gold Loan?
Gold loan eligibility is simple. Here's what typically applies:
- Age: 18 to 75 years
- Gold purity: Jewellery between 18K and 22K
- Ownership: The gold must belong to the applicant/borrower
- Occupation: Salaried, self-employed, business owners, homemakers, farmers. Most borrower profiles qualify.
Lenders assess the gold, not your financial history. Someone with a thin credit file or an irregular income can access a gold loan just as easily as a salaried professional.
Note: Shriram Gold Loan offers an LTV of up to 80% of your gold's assessed value. Applicable LTV is subject to Shriram Finance's assessment and prevailing Reserve Bank of India (RBI) guidelines.
What Documents Do You Need for a Gold Loan?
Documentation for a gold loan is minimal by design. Keep these ready before you apply:
- Identity proof — Aadhaar Card, Voter ID, Passport, Driving Licence, or Permanent Account Number (PAN) card
- Address proof — any of the above, or utility bills (electricity, water, gas)
- Passport-sized photograph
- The gold itself — brought to the branch for physical assessment
No income documents. No bank statements. No property papers. The assessment is done in your presence at the branch — transparent, quick, and straightforward.
How to Apply for a Gold Loan: Step by Step
The gold loan application process has very few moving parts. Here's how it typically works:
- Register online or visit a branch: You can initiate the process on the lender's website or app or simply walk into your nearest branch with your gold and documents.
- Gold assessment: A trained appraiser examines the gold's purity and weight in your presence. Stones, clasps, and non-gold attachments are excluded from the calculation.
- Loan offer: Based on the assessed value and applicable Loan-to-Value (LTV) ratio, the lender presents the eligible loan amount and applicable interest rate.
- Document verification: Know Your Customer (KYC) documents are checked and verified.
- Disbursal: Once everything is in order, the funds are credited to your bank account.
Let’s say a trader needs ₹70,000 for restocking before a festival season. He visits a branch at 10 AM with a gold chain and his Aadhaar card. By early afternoon, the funds get credited in his account. His gold is stored safely in the branch vault. Four months later, after the season, he repays and collects his gold back. That's how the process works in practice.
Gold Loan Process: How Is the Gold Loan Amount Determined?
The loan amount you receive depends on two factors: the current market value of your gold and its purity. Shriram Finance currently offers loans up to 80% of your gold's assessed value, subject to purity and the applicable LTV framework.
What are Some Gold Loan Benefits?
The following are some gold loan benefits:
No income proof required: The loan is secured against gold, so your income or employment status doesn't determine approval.
Lower interest rates than unsecured loans: Because the loan is backed by collateral, interest rates are significantly lower than personal loans or credit cards. Gold loan interest rates start at 10%* per annum (p.a.) — subject to change based on loan amount, tenure, and gold purity.
Flexible repayment options: Choose from Equated Monthly Instalments (EMIs), interest-only payments during the tenure with principal at the end, or lump-sum bullet repayment. You're not locked into one structure.
No end-use restrictions: Medical bills, school fees, business working capital, home repairs — the funds can go toward anything. The lender doesn't ask.
Safe custody of your gold: Your jewellery is stored in a secured, surveilled vault for the duration of the loan. You get back your gold the moment you repay.
Apply for Shriram Gold Loan
If you have gold at home and a financial need on the horizon — planned or unplanned — checking your eligibility takes very little time. The assessment is done in your presence, the process is transparent, and there's no obligation until you accept the offer.
Apply online or walk into your nearest Shriram Finance branch with your gold and a valid ID. Know your eligible loan amount before you commit to anything.
FAQs
What is a gold loan and how does it work?
A gold loan is a secured loan where you pledge gold jewellery or ornaments as collateral. The lender assesses the gold's purity and weight, applies an LTV ratio to determine the loan amount, and disburses the funds. You repay the principal and interest over the chosen tenure, after which your gold is returned. The process doesn't require income proof or a minimum credit score.
What is the eligibility criteria for a gold loan?
You need to be between 18 and 75 years of age, own the gold you're pledging, and have gold jewellery of 18 to 22 karat purity. Salaried individuals, self-employed professionals, business owners, homemakers, and farmers all qualify. There's no minimum income or credit score requirement.
What documents are required for a gold loan?
You'll need a valid identity proof (Aadhaar, PAN, Voter ID, or Passport), address proof, and a passport-sized photograph. No income documents, ITR, or bank statements are required. The gold itself is assessed at the branch in your presence.
Can I apply for a gold loan online?
Yes. You can register your mobile number and initiate the application on the lender's website or app. A loan executive will call to guide you through the next steps, after which you visit the nearest branch for gold assessment and verification. Disbursal typically happens the same day once the process is complete.
What are the repayment options for a gold loan?
Most lenders offer multiple repayment structures — EMIs (monthly payments covering principal and interest), interest-only payments during the tenure with the principal repaid at the end, or a bullet repayment where everything is paid in one go at the end. Choose based on how regular your income is. You can also foreclose the loan early — with Shriram Gold Loan, foreclosure is allowed after 7 days from disbursal with zero additional charges.
Is the gold safe while it's with the lender?
Yes. Licensed banks and Non-Banking Financial Companies (NBFCs) regulated by the RBI are required to store pledged gold in secured, insured vaults with electronic surveillance. The gold is assessed and stored transparently in your presence at the branch. It's returned to you immediately upon full repayment.
How is the gold loan amount calculated?
The loan amount is based on the net gold weight (after deducting stones and non-gold material), the gold's purity in karats, the current market rate of gold, and the lender's applicable LTV ratio. Higher purity gold fetches a higher assessed value per gram, which directly increases your eligible loan amount.