Transform Your Gold Assets into Liquid Cash with Gold Loans

In the world of finance, gold has long been considered a valuable asset. It’s not just a symbol of wealth; it can also be a source of quick and hassle-free funds through gold loans. A gold loan is a type of secured loan where you pledge your gold as collateral to a lender in exchange for funds. It’s a quick and straightforward way to access money when you need it most. Unlike unsecured loans, a gold loan provides a level of security to the lender, allowing for more favorable terms.

With this blog, we aim to demystify the world of gold loans and provide you with a comprehensive understanding of how they work. From the basics to the nitty-gritties, we’ll take you on a journey through the entire gold loan process.

Gold Loan: Collateral and Eligibility

For a gold loan, you’ll need to pledge gold assets. The lender assesses the purity and value of your gold to determine the loan amount. Here are some common forms of gold collateral that are accepted for gold loans:

  • Gold Jewelry: This includes items like gold necklaces, rings, bracelets, earrings, and other ornamental pieces made of gold.
  • Gold Coins: Certain gold coins, such as those issued by government mints or recognized institutions, are accepted as collateral.
  • Gold Bars: Gold bars, typically produced by reputable mints, can also be used as collateral for gold loans.
  • Gold Ornaments: Beyond traditional jewelry, lenders may accept gold ornaments, such as gold idols or figurines.
  • Gold Biscuits: Some lenders may accept gold biscuits, which are small, rectangular pieces of gold that can be used as collateral.

Eligibility Criteria

Here are the typical eligibility criteria for obtaining a gold loan:

  1. Age: Most lenders require borrowers to be at least 18 years old to apply for a gold loan. Some lenders may have a higher minimum age requirement.
  1. Ownership of Gold: You must be the legal owner of the gold that you intend to use as collateral for the loan. Borrowers are usually required to provide proof of ownership, such as bills of purchase or other relevant documents.
  1. Type and Purity of Gold: Lenders may have specific requirements regarding the type and purity of the gold items you want to use as collateral. Gold jewelry, coins, bars, and ornaments are generally accepted, but the purity and quality of the gold may affect the loan amount you can obtain.
  1. Loan Amount: The loan amount you can receive is usually a percentage of the appraised value of the gold collateral. The exact percentage, known as the loan-to-value ratio (LTV), may vary from lender to lender.
  1. KYC Documents: You will typically be required to provide Know Your Customer (KYC) documents, such as a government-issued photo ID (e.g., passport, driver’s license, Aadhar card), proof of address (e.g., utility bills, rental agreement), and passport-sized photographs.
  1. Repayment Capacity: Lenders may assess your ability to repay the loan, so you may need to provide income and employment details. Some lenders may not require a credit check for gold loans.
  1. Loan Application Form: You will need to fill out a loan application form provided by the lender, providing details about the gold you’re pledging and other necessary information.

Gold Loan Application Process

The application process for a gold loan typically involves several steps, and it may vary slightly depending on the lender. Here’s a general overview of the gold loan application process:

Step 1- Choose a Lender:
Research and select a lender or financial institution that offers gold loans. You can visit their physical branches or apply online.

Step 2- Check Your Gold Loan Eligibility:
Check the eligibility criteria and gather the necessary documents, such as KYC documents, proof of address, and any additional documents required by the lender.

Step 3- Approach the Lender:
If you prefer a physical application, visit the lender’s nearest branch. For online applications, visit the lender’s official website and navigate to the gold loan section.

Step 4- Submit Your Application:
Fill out the gold loan application form, either on paper at the branch or online on the lender’s website. Provide accurate information about yourself, the gold collateral, and the loan amount you need.

Step 5- Valuation of Gold:
At the lender’s branch or through a doorstep service, your gold collateral will be assessed and appraised to determine its purity and value. The lender’s representative will weigh and test the gold to establish its worth.

Step 6- Documentation:
Submit your KYC documents, proof of address, and any other required documentation, such as photographs.

Step 7- Loan Agreement:
Review and sign the loan agreement, which outlines the terms and conditions of the gold loan, including interest rates, tenure, repayment schedule, and penalties for default.

Step 8- Disbursement of Loan Amount:
Once the appraisal and documentation are completed, the lender will disburse the loan amount to your bank account or provide it to you in cash or as a demand draft, depending on your preference.

Best Gold Loans in India

If you have decided to borrow a gold loan, here are some of the best options available to you in India, as of 2023:

LenderGold Loan Interest RateLoan Tenure
Central Bank of IndiaUp to 8.55% p.a. 12 months
State Bank of India7.30% p.a. onwards12 months
Punjab and Sind Bank8.60% p.a. onwards12 months
Muthoot Finance9% p.a. onwards12 months

Gold Loan Risks and Considerations

It’s essential to repay your gold loan as per the agreed terms. Defaulting on payments can result in losing your pledged gold. Be aware of the consequences and only borrow what you can repay comfortably.

Safeguard your pledged gold by ensuring it’s stored securely with the lender. This will prevent any unnecessary issues during the loan period.


In summary, gold loans provide a versatile and accessible way to access funds quickly, using your valuable gold assets as collateral. By understanding how gold loans work and carefully considering your options, you can make informed financial decisions that align with your goals and priorities. Whether it’s a medical emergency, educational expenses, or a business venture, gold loans can be a valuable tool in your financial arsenal, offering a secure and convenient means of accessing the funds you need.


Frequently Asked Questions (FAQs):

Finnable has set a required minimum age for personal loan of 21 years for individuals to be eligible for a personal loan. This ensures that applicants have reached legal adulthood and are capable of entering into a financial agreement.

Yes, Finnable understands the financial needs of young borrowers and offers personalised loan options tailored to their specific requirements. Whether it's financing higher education, purchasing essential items, or starting a business venture, Finnable provides support to young individuals seeking financial assistance.

Borrowers nearing retirement may have unique financial needs, such as retirement planning, medical expenses, or supporting their children's education. Finnable offers personalised loan solutions that consider the specific circumstances of pre-retirement individuals, helping them meet their financial goals.

Unfortunately, no. Finnable does not, at the moment, offer any loans to senior citizens. Currently, 60 is the maximum age for personal loans set by Finnable

Other than personal loan age limits, Finnable considers various other factors for determining loan eligibility. These factors may include the applicant's income, credit score, repayment capacity, and employment stability. By assessing these aspects comprehensively, Finnable ensures that borrowers across different age groups can access the loan products that best suit their financial needs. 


Amit Arora

I am a seasoned retail banker with over 21 years of global experience across business, risk and digital. In my last assignment as Global Head Digital Capabilities, I drove the largest change initiative in the bank to deliver the end-to-end digital program with over US$1 billion in planned investment. Prior to that, as COO for Group Retail Products & Digital, I implemented a risk management framework for retail banking across the group.
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