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A gold collateral loan lets you pledge eligible gold jewellery, ornaments, or coins as security to borrow funds without selling your gold. We assess your gold's purity and net weight to determine its value and your eligible loan amount. Once you repay the loan and applicable charges, your pledged gold is returned to you. A gold loan can be used to meet personal, medical, education, or other financial needs.
Key takeaways
Gold collateral loans offer quick, secure access to funds. Since the loan is secured against your pledged gold, approval is faster and documentation stays minimal.
This makes gold collateral loans both secure and borrower-friendly.
Using gold as collateral for a loan is straightforward. We evaluate your gold based on its purity and weight, and determine your loan amount using the lower of the previous day's closing price or the 30-day average closing price, published by the Indian Bullion and Jewellers Association (IBJA) or a Securities and Exchange Board of India (SEBI)-regulated commodity exchange, along with the applicable LTV ratio.
Here is how the process works:
Worked example: If your eligible gold is valued at Rs. 2 lakh and the applicable LTV is 85% (for loans up to Rs. 2.5 lakh), your loan amount would be Rs. 2,00,000 × 85% = Rs. 1,70,000.
Wondering how much you can borrow on your gold? Just check your gold loan eligibility—it takes seconds and requires minimal paperwork.
As per RBI's tiered LTV structure:
| Loan amount | Maximum LTV |
|---|---|
| Up to Rs. 2.5 lakh | 85% |
| More than Rs. 2.5 lakh to Rs. 5 lakh | 80% |
| More than Rs. 5 lakh to Rs. 2 crore | 75% |
This structure must be maintained throughout your loan tenure, and figures are subject to change as per RBI guidelines.
Bajaj Finance accepts eligible 18-22 karat gold jewellery and ornaments, and gold coins up to 24 karat purity, subject to applicable terms.
Gold is one of several assets lenders may accept as collateral, alongside real estate, fixed deposits, vehicles, or financial investments, depending on the specific loan product and lender policy.
When applying for a collateral loan, lenders require you to pledge an asset with monetary value as security. The type of asset accepted depends on the lender's policy and the loan product. Along with an eligible asset, borrowers must also meet the lender's basic eligibility criteria and complete the required KYC verification.
To apply, you must be an Indian citizen aged 21 to 80 years, with any one valid KYC document — Aadhaar card, Voter ID, Passport, Driving Licence, NREGA Job Card, or a National Population Register letter. For loans of Rs. 5 lakh or above, a PAN card may also be required.
Repayment options include monthly, bi-monthly, quarterly, half-yearly, or annual interest payments, with the principal due at the end of the tenure. The loan tenure can range from a 1 day to 12 months, depending on your requirements. Interest rates for gold loans are generally lower than those for unsecured loans, providing a cost-effective borrowing solution.
Understanding these repayment terms helps borrowers plan their finances effectively and ensures timely repayment, which is crucial for retrieving the pledged gold.
Using gold as collateral means pledging eligible gold jewellery, coins or ornaments with a lender to secure a loan. The loan amount is generally based on the gold’s purity, net weight, applicable gold rate and LTV. Follow these steps to understand how the process works:
Curious about your loan eligibility? Enter your mobile number to see how much you can get for your gold.
The gold loan interest rate represents the cost of borrowing against your gold. With Bajaj Finance, gold loan interest rate starts at just 9.50% to 24.25% per annum. You can rest assured of zero hidden charges with our 100% transparent terms and conditions.
Applying for a Bajaj Finance Gold Loan is quick and convenient. Just visit your nearest branch with your gold and valid KYC documents. The team will check the purity and weight of your gold, calculate your eligible loan amount, and process it on the spot. In most cases, the loan amount is disbursed to your account the same day, so you can access funds exactly when you need them. For even more convenience, you can also apply online through the Bajaj Finance App or website, making the process seamless from start to finish.
It takes just 2 steps to check your eligibility for a Bajaj Finance Gold Loan. Enter your mobile number now.
The value of gold collateral is determined through a process of appraisal. A qualified appraiser assesses the gold's purity, usually measured in carats, and its weight. The appraiser then uses the applicable gold price on the day of assessment to calculate its value. Typically, higher purity gold, such as 22-carat, holds more value. The lender will then offer a loan amount based on a percentage of this appraised value.
Yes, you can obtain a loan using gold as collateral. Bajaj Finance offers gold loan, where you pledge your gold jewellery, ornaments or coins, to secure the loan. The loan amount is determined based on the lower of the previous day’s closing price or the 30-day average closing price published by IBJA or a SEBI-regulated commodity exchange, and the approval process is usually quick and straightforward. This type of loan provides immediate access to funds at relatively low-interest rates, making it an attractive option for those needing urgent financial assistance.
Yes, gold is an excellent collateral because it has a stable value, is easily verifiable, and widely accepted by lenders. It allows quick loan approval and offers borrowers access to funds even if they have a low credit score, making it a reliable security for loans.
Yes, gold acts as collateral security when pledged against a loan. It serves as a guarantee for the lender, reducing their risk. If the borrower defaults, the lender can sell the gold to recover the loan amount, making gold a valuable and secure form of collateral.
A gold collateral loan is a secured loan where you pledge eligible gold jewellery, coins or ornaments to a lender in exchange for funds. The lender evaluates the gold’s purity and weight, determines the eligible loan amount as per applicable LTV norms, securely stores the pledged gold, and returns it after you repay the loan along with the applicable interest.
Bajaj Finance Limited (BFL) has the sole and absolute discretion, without assigning any reason to accept or reject any application as per BFL policy. *
