How to get back pledged gold ornaments?

2 min read
30 October 2023

Availing a gold loan requires borrowers to pledge their gold jewellery with the financial institution. The pledged gold ornaments remain in the custody of the lending institution until the borrower completely repays the loan amount along with interest. After full repayment, the borrower can gain back the pledged gold jewellery.

What type of gold can I pledge?

The form and purity of gold are of critical importance when it comes to applying for a gold loan. Jewellery is the most common form of gold used by individuals to avail funds. As for the purity level of gold, most lenders seek gold jewellery with 18-22 karat purity to extend funding.

gold loan per gram rate for any given day determines the maximum loan amount an individual can avail.  Most lenders offer up to 75% loan-to-value (LTV) of the gold.

It means that if the per gram market value of gold for the day is Rs. 1,500, each gram of gold in the ornament can fetch up to Rs. 1,125 as a gold loan. The market rate of gold per gram also impacts the
gold loan interest rates applicable.

When can I get back my gold ornaments?

Pledging gold ornaments involves handing over the possession of the jewellery and the rights to its transactions to the lending institution until repayment of the entire loan amount. Once the loan repayment is complete, the borrower can get back possession and all rights to such possession through a release process involved.

Bajaj Finance also offers a part-release facility that enables borrowers to regain possession of a part of the total pledged gold after paying an equivalent amount. Such a facility can be availed in case of an emergency.

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