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Gold in India is more than just jewellery — it is a part of our traditions, celebrations, and a source of security in tough times. Beyond its beauty, gold holds special value because it can be pledged as collateral to get quick funds when you need them most. Over the last few years, more people have turned to gold loans as a practical, reliable way to manage financial challenges. With Bajaj Finance, this process is even simpler — you get transparent valuation, a high LTV based on RBI-approved norms, and your pledged gold kept in secured vaults, insured against theft, burglary, fire at the branch, or misplacement. Understanding how the gold loan process works can help you make confident, informed decisions whenever you need funds.
Key takeaways
Interest rates, repayment options, tenure, and applicable charges can affect the overall loan cost.
A gold loan is a secured loan where you pledge eligible gold jewellery, ornaments or accepted gold coins as collateral to borrow funds without selling your gold. The lender assesses the purity, net weight and applicable gold value to determine the eligible loan amount and applies the relevant LTV ratio. You repay the loan through the agreed repayment option along with applicable interest and charges. Once the outstanding dues are cleared, your pledged gold is returned. Gold loans can be used to meet various financial needs, including medical expenses, education, or personal expenses.
Additionally, facilities like attractive gold loan rate per gram, minimal documentation, multiple repayment tenures and hassle-free disbursal, makes gold loans a reliable source of quick finance from Rs. 5,000 to Rs. 2 crore.
Quick tip: Do not let your jewellery sit idle—tap into its value with a gold loan that suits your needs. Check your gold loan eligibility today!
A loan against gold is a unique credit option because of its working principle. Here is how gold loan works:
To apply for a gold loan, you just need to fill out an online application form. You need to provide all the necessary details in the form and submit. Or if it suits you better, you can also visit the nearest gold loan branch to avail of the loan offline.
This is where the gold loan process is different from that of other financial products. After applying for credit, the gold pledged as collateral will be evaluated using the state-of-the-art karat metres to assess its purity and weight, considering the applicable gold price. Bajaj Finance considers lower between the previous day's closing price or the 30-day average closing price published by IBJA or a SEBI-regulated commodity exchange. This protects you from a sudden price spike inflating things unrealistically and protects the lender from the opposite. Based on this evaluation, we determine the exact loan amount that an individual is eligible for.
Here, you must note that RBI has capped the LTV ratio of a gold loan up to 85%. Lenders extend the loan amount to the applicant based on the evaluation and price of pledged gold. Currently, Bajaj Finance only accepts gold jewellery or ornaments worth 18-22 karat and gold coins up to 24 karat purity as a collateral against the loan. In this regard, you can use a gold loan calculator beforehand to assess repayment liability. This online tool displays accurate results within seconds and allows you to plan and manage your finances efficiently. The maximum LTV eligible for a loan depends on the loan amount and cannot be more than the limits given. To know more, click here.
The next step on how this credit facility works is the eligibility and documentation. Being a secured credit option, gold loans do not impose strict eligibility and documentation. However, you need to be an Indian citizen, aged between 21 to 80 years, to avail of this loan. You would also need to provide your basic KYC documents for gold loan to complete the verification process.
After evaluating gold articles, documentation and signing of a loan agreement, the credit disbursal process begins. Finally, borrowers will receive their desired loan amount into their registered account. The entire gold loan process from application to disbursal often takes just one branch visit to complete and ensures a hassle-free loan procedure.
Curious about your loan eligibility? Enter your mobile number to see how much you can get for your gold.
The interest rate on a gold loan depends on the lender, the loan amount, and the repayment terms. For Bajaj Finance Gold Loan, the interest rate usually starts from as low as 9.50% to 24.25% per annum, but it can vary based on the gold’s purity, loan-to-value ratio, and repayment schedule chosen by the borrower.
These loans generally have lower gold loan interest rate compared to unsecured loans because your gold acts as security. Since lenders have the gold as collateral, they take less risk, which helps in offering better rates. With Bajaj Finance, you also get multiple repayment options, like paying interest regularly and the principal at the end of the tenure. The gold loan interest rate depends largely on:
To know the exact rate applicable to your requirement, you can check your gold loan eligibility online or visit the nearest Bajaj Finance Gold Loan branch.
When you take a gold loan with Bajaj Finance, the interest is calculated based on the loan amount, applicable interest rate, and chosen repayment tenure. Since gold loans are secured by eligible gold, they generally offer lower interest rates than many unsecured loans. You can also use the gold loan calculator to estimate your interest payable and repayment amount before applying.
For example, if the value of the collateral is Rs. 2 lakh and the applicable LTV is 85% for exposure below Rs. 2.5 lakh, at 24% annual interest on 22 Karat gold and gold rate (as per carat) considered Rs. 13,200 — the total eligible loan amount (including interest) is Rs. 1.70 lakh
The actual interest payable may vary depending on your repayment option, loan tenure, and the applicable gold rate. Understanding this calculation helps you plan your repayments and manage your borrowing more effectively.
Bajaj Finance offers multiple repayment options for gold loans, making it easy for you to manage payments:
These options give you freedom to choose a plan that fits your financial situation while keeping repayments manageable.
A gold loan can help you access funds by pledging eligible gold without selling it. With Bajaj Finance, you can choose features designed to make borrowing and repayment easier.
Overall, a gold loan is a safe, fast, and convenient way to meet financial needs without selling your jewellery.
With Bajaj Finance, you can pledge eligible gold jewellery, ornaments and coins as collateral for a gold loan. As of now, gold bars, idols, utensils and gold-plated items are not accepted.
| Gold type | Accepted as collateral? |
|---|---|
| 18-22 karat gold jewellery | Yes |
| 18-22 karat gold ornaments | Yes |
| Gold coins up to 24 karat purity | Yes |
| Gold bars | No |
| Gold idols | No |
| Gold utensils | No |
| Gold-plated items | No |
It is important to know that only the intrinsic gold value is considered during valuation; stones, gemstones and other non-gold components are excluded.
Pro tip: Check your gold loan eligibility to find out how much you may be able to borrow against your eligible gold jewellery.
A gold loan settlement is an arrangement between the borrower and lender to close an outstanding Gold Loan by paying an agreed settlement amount, usually when the borrower is unable to repay the loan as originally scheduled. Understanding how gold loan works helps you decide whether to repay your loan at maturity or opt for renewal before it ends.
The available option depends on your lender's policy, your loan status, and applicable regulatory guidelines.
When unexpected expenses arise, understanding how does gold loan work can help you access funds quickly without selling your gold. Since a gold loan is secured against eligible gold jewellery, the approval process is usually faster than many unsecured loans and requires only basic KYC documentation.
Anyone can apply for our gold loan, as long as they meet the basic gold loan eligibility criteria mentioned here. They will be asked to submit a few basic documents to complete their application process.
PAN card is not required. However, if you apply for a gold loan of Rs. 5 lakh or above you will be asked to submit your PAN card.
Applying for a gold loan with us is quick and easy. You can either visit the nearest Bajaj Finance Gold Loan branch or apply online through the Bajaj Finance App or official website from the comfort of your home.
To apply online, just follow these easy steps:
Once done, you will receive a call from our representative and guide you on the next steps.
Check your gold loan eligibility in seconds to know how much you can borrow easy, accurate, and hassle-free.
Lenders determine the gold loan amount based on the value and purity of the gold you provide as collateral. Bajaj Finance considers lower between the previous day's closing price or the 30-day average closing price published by IBJA or a SEBI-regulated commodity exchange. This protects you from a sudden price spike inflating things unrealistically and protects the lender from the opposite.
The maximum LTV eligible for a loan depends on the loan amount and cannot be more than the limits given. To know more, click here.
We offer multiple gold loan repayment options where you may choose to repay your gold loan interest on a monthly, bi-monthly, quarterly, half-yearly, or annually basis as per your convenience. Please note that the principal amount and pending interest, if any, will be due for payment at the time of loan maturity.
The loan amount is based on your gold's purity, weight, and current market rate. As per RBI's tiered LTV structure, lenders can offer up to 85% of gold value for loans up to Rs. 2.5 lakh, up to 80% for loans between Rs. 2.5 lakh and Rs. 5 lakh, and up to 75% for loans between Rs. 5 lakh and Rs. 2 crore.
If you miss payments, Bajaj Finance gives ample reminders. If the loan is not cleared even after the grace period, the pledged gold may be auctioned to recover the amount. It is important to repay on time to avoid losing your gold.
A gold loan is a secured loan where you pledge eligible gold jewellery, ornaments or coins as collateral to borrow funds without selling it. To understand how gold loan works, the lender first checks the purity and weight of your gold, values it using applicable regulatory guidelines, and determines the eligible loan amount based on the permitted loan-to-value (LTV) ratio. Once approved, the funds are disbursed, and your gold is returned after the loan is fully repaid.
The loan-to-value (LTV) ratio is the maximum percentage of your gold's eligible value that a lender can offer as a loan. In India, the applicable LTV depends on the loan amount and RBI guidelines. With Bajaj Finance, loans up to Rs. 2.5 lakh may have an LTV of up to 85%, loans above Rs. 2.5 lakh and up to Rs. 5 lakh have LTV up to 80%, and loans above Rs. 5 lakh up to Rs. 2 crore have LTV up to 75%, subject to applicable terms and regulations.
To get a gold loan, apply for a gold loan online or visit your nearest Bajaj Finance Gold Loan branch with your gold and any one of the basic KYC documents. It will be checked for purity and weight. Based on its value, the loan amount is offered. After basic paperwork, the loan is approved, and funds are given often on the same day.
A gold loan gives you quick access to money using your gold. It needs minimal documents and offers fast approval, multiple repayment options, and low interest rates. You also keep ownership of your gold and can get it back after full repayment.
Bajaj Finance Limited (BFL) has the sole and absolute discretion, without assigning any reason to accept or reject any application as per BFL policy. *
