Key Highlights
- A gold loan lets you borrow money by pledging gold jewellery, and typically no income proof or credit score required.
- Shriram Gold Loan offers up to 80%* LTV on your gold's assessed value, subject to RBI guidelines.
- Funds are disbursed the same day in most cases.
- Under RBI's Lending Against Gold and Silver Collateral Directions, 2025, lenders must follow strict valuation, storage, and auction norms.
Let’s say you have gold jewellery at home that may be a chain, a set of bangles, or earrings from a family occasion. You are in urgent need of finances, but you do not want to sell your gold. A gold loan is the most direct bridge between those two facts.
This guide explains exactly how it works, what it costs, who qualifies, and what to watch out for.
What Is a Gold Loan?
A gold loan is a secured loan. You pledge your gold jewellery with a bank or non-banking financial company (NBFC) and they give you money based on the value of that gold. You repay the loan with interest within the agreed tenure. Once repaid, you get your gold back.
Unlike a personal loan, your income or credit score is not the primary deciding factor. The gold itself is the security. This is why gold loans are accessible to farmers, homemakers, traders, and small business owners who might not qualify for other loans.
Gold Loan Process: Steps to Apply for a Gold Loan
The process is straightforward and usually completed in a single branch visit.
Step 1 — Visit the branch: Bring your gold jewellery and KYC documents (Aadhaar + PAN is usually accepted).
Step 2 — Gold assessment: A trained appraiser examines purity and weight in your presence. Stones, gems, and non-gold parts are excluded from the calculation.
Step 3 — Loan offer: Based on the assessed value and the applicable LTV ratio, the lender tells you the eligible loan amount and interest rate.
Step 4 — Document verification: KYC documents are checked. For smaller loan amounts, income proof is usually not required.
Note: In certain cases, for higher loan amounts, the lender may ask for income proof and a credit score check as part of internal policy and regulatory compliance.
Step 5 — Disbursal: Funds are credited to your bank account — usually the same day.
✅ Pro Tip Always verify the appraiser’s assessment in your presence. Under RBI's 2025 Directions, lenders must issue a gold purity certificate (printed or electronic) to the borrower. Ask for yours.
Gold Loan Eligibility: Who Can Apply in India?
- Any Indian citizen between 18 and 75 years of age.
- Salaried employees, self-employed individuals, homemakers, farmers, traders, business owners.
- No minimum income required as the loan is secured against gold, not your earnings.
- Gold must be between 18 and 22 carats for most lenders.
Not sure if you qualify? Use the Shriram Gold Loan eligibility calculator to check in under a minute.
Gold Loan Approval: What Documents Do You Need?
- Identity proof — Aadhaar (mandatory), PAN (mandatory), Voter ID, Driving Licence, or Passport
- Address proof — Aadhaar, utility bill, Voter ID, or Passport
- Recent passport-size photograph
Understanding Loan-to-Value (LTV): How Much Can You Borrow?
Your loan amount depends on the purity and weight of your gold and the current market price on the day of assessment. Shriram Finance currently offers up to 80%* of the assessed value as the loan amount, subject to RBI's LTV guidelines.
Example: 20 grams of 22K gold, valued at ₹1,00,000 today → eligible loan of up to ₹80,000* (at 80% LTV).
Watch Out The LTV applicable to your loan is determined on the day of sanction. If gold prices fall significantly during the loan tenure and LTV breaches the permitted limit for 30+ days, lenders may classify the account as NPA under RBI 2025 Directions. Keep your contact details updated with the lender.
To understand what your monthly instalment works out to, use the Shriram Gold Loan EMI Calculator and estimate your potential gold loan EMI.
Gold Loan Repayment Options
Typically, you have flexible repayment options for your gold loan. They include the following:
- EMI (reducing balance) — fixed monthly payment covering principal and interest
- Interest-only monthly payments — pay only interest each month; principal at the end
- Bullet repayment — pay everything (principal + interest) at the end of the tenure
- Part-prepayment — pay down the principal early to reduce total interest
Shriram Finance allows foreclosure any time after loan disbursal with zero foreclosure charges.
Related reading: Gold Loan Repayment Options - Choosing the Plan That Fits Your Cash Flow
Is Your Gold Safe When You Pledge It? Here's What RBI Requires
Under RBI regulations, all pledged gold must be stored in secure vaults with electronic surveillance. On repayment, lenders must return your gold within 7 working days. If delayed, they must pay ₹5,000 per day as compensation.
At Shriram Finance, pledged gold is packed securely in your presence at the branch and stored in tamper-evident packaging.
Whether you prefer to apply online or visit a branch, Shriram Finance makes the gold loan process simple and convenient.
Ready to get started? You can apply online or walk into your nearest Shriram Finance branch for a quick gold assessment and loan offer. Start your online gold loan application here.
FAQs
What is the minimum gold weight required for a gold loan?
At Shriram Finance, you need a minimum net gold weight of 0.48 grams for a ₹5,000 loan. This varies by lender. So bring your jewellery to the branch for a free assessment.
Can I apply for a gold loan if I do not have a PAN card?
If you do not have a PAN card, you may submit Form 60 for loans below the threshold of ₹50,000. Confirm the current policy with your lender’s branch.
Will taking a gold loan affect my CIBIL score?
A gold loan does not automatically affect your credit score since the loan is secured against collateral. However, missed or delayed repayments are reported to credit bureaus and can lower your score.
Can I take a gold loan on jewellery that is not in my name?
The person applying for the gold loan should be able to prove ownership or provide the required consent or documentation for the pledged jewellery. If ownership is unclear, the lender may ask for additional KYC, a self-declaration, or other supporting documents before proceeding.
What happens if I cannot repay the loan on time?
If you cannot repay on time, the lender may charge penal interest and may begin recovery proceedings under RBI rules. If the loan remains unpaid, pledged gold can be auctioned after proper notice, and any surplus after adjusting dues is generally refunded to the borrower.