® 
A gold loan is a type of a secured loan. It is when an individual pledges his gold coins or jewellery as security for the loan amount.
How do I avail a gold loan?
1. Visit your nearest lender’s branch with the gold coins jewellery that you wish to pledge for the loan amount.
2. The gold coins or jewellery that you provide as security will then be assessed and evaluated by the lender.
3. Around 60% to 70% of the gold’s market value will then be released as the loan amount. The amount varies from lender to lender
4. The gold is then locked away safely and securely in a vault or a locker.
5. The gold is then returned to the individual when the loan is repaid fully.
Individuals with a poor credit score or with no credit score can also avail a gold loan as it is a secured loan. This can then help him/her build or improve their credit score if monthly payments are made on time. The lender has the rights to sell the gold to compensate for the loan amount if the individual fails to repay the loan. So, defaulting on payments or not repaying the loan amount can be a big loss for the individual.
Interest rates for a gold loan begin at 9.95% and can go up to 16% depending on the credit profile of the individual. The interest rates are low as the lender does not have a risk factor involved as it is a secured loan. The tenures for a gold loan are generally very short. They range from 3 months to 4 years in some cases.
Documents needed:
1. ID proof
2. Address proof
ID and Address proof can be shown through the following documents:
- Passport
- Diving License
- Voter's ID Card
- Aadhaar Card
- PAN (Permanent Account Number) Card or
- Form 60
To apply for a gold loan, click here.