What is a gold loan?
If you are wondering what is gold loan, it is a secured loan where you pledge your gold jewellery to get funds quickly. By using your gold as collateral, lenders can offer you a convenient way to meet your financial needs. One key information about gold loan is that the loan amount depends on the purity and weight of the gold you pledge.
With Bajaj Finserv Gold Loan, you can borrow amounts starting from Rs. 5,000 and Rs. 2 crore, with competitve interest rates. You also benefit from fast approval, minimal paperwork, and multiple repayment options. This gold loan information makes it clear why it is a popular choice for managing immediate expenses.
Whether you call it loan against gold or simply a gold loan, it offers a secure and simple solution without selling your precious jewellery. This section gives you all about gold loan to make an informed decision.
How does a gold loan work?
Here’s all about gold loan and how the process works, explained in simple points:
- Pledging your gold as security: A gold loan works by pledging your 18-22 karat gold jewellery as collateral with the lender. This is the basic idea of what is gold loan—you use your gold to secure a loan without selling it.
- Gold evaluation and loan amount: The lender checks the purity and weight of your gold to decide how much you can borrow. The loan amount is based on the prevailing market value of your gold and the LTV offered by the lender. With us, you can get up to 75% of your gold’s value, as per the guidelines set by the RBI. These gold loan details help you understand the maximum funds you can access. To estimate the loan amount, you can use our gold loan calculator to get an accurate estimates.
- Quick approval with minimal documents: Since the loan is secured against physical gold jewellery, it involves minimal paperwork. You just need any one of the basic KYC documents for verification. This easy approval process is an essential part of information about gold loan.
- Multiple repayment options: When thinking about how does a gold loan work, repayment flexibility matters. You can repay the interest on monthly, bi-monthly, quarterly, half-yearly or annual basis. Any interest or principal due should be paid before the tenure ends. This gives you control over your finances.
- Safe storage of your gold: While the loan is active, your pledged jewellery is securely stored by the lender. This ensures your valuables are safe until the loan is fully repaid. Bajaj Finance offers a complementary insurance for the pledged gold that covers it against theft and misplacement.
- Lower interest rates compared to unsecured loans: One important gold loan information point is that interest rates are usually lower than other loans, as the loan is secured by gold. This makes it a cost-effective way to borrow.
- Getting your gold back after repayment: Once you clear the loan, your gold is returned safely. One of the key gold loan details is that you can retain ownership of your gold throughout the process.
By knowing what is loan against gold and how it works, you can make a smart choice to access funds quickly, securely, and affordably without losing your gold ownership.
How to apply for a gold loan
- Click on ‘APPLY’ to open our online application form
- Enter your 10-digit mobile number and click on ‘GET OTP’
- Submit the OTP
- Select the branch nearest to you
- Download the loan eligibility letter
Once done, you will receive a call from our representative to guide you on the next steps.
What are the gold loan interest rate and charges?
The affordability of a gold loan largely depends on the gold loan interest rates you are offered. At Bajaj Finance, we provide competitive interest rates starting from9.50% to 24% per annum. The final rate is based on factors such as the loan amount, repayment tenure, and your gold’s value.
By knowing your interest rate upfront, you can plan your repayments comfortably without worrying about unexpected costs. We ensure complete transparency so you are fully aware of your repayment schedule and terms, with no hidden charges.
Here is a breakdown of the fees and charges that may apply to your gold loan:
| Types of fee | Applicable charges |
| Interest rate | 9.50% to 24% per annum |
| Processing fees | 0.15% of the loan amount (inclusive of applicable taxes).Subject to a minimum Rs. 99 (inclusive of applicable taxes) and maximum of Rs. 600 (inclusive of applicable taxes). |
| Stamp duty (as per respective state) | Payable as per state laws and deducted upfront from loan amount |
| Cash handling charges | %$$Rs. 50 (inclusive of applicable taxes) applicable for cash disbursement only. |
| Penal charge | 3% per day on outstanding balance - Penal charge will be over and above the interest rate slab mentioned above which shall be applicable/chargeable in case of default in repayment of the outstanding dues post maturity. |
| Convenience fee | Convenience fee of Rs. 149 (inclusive of applicable taxes) shall be levied for part release of ornament(s) pledged. |
| Part-prepayment charges | NIL |
| Foreclosure charges | Nil, any time post disbursement of loan |
What are the documents required for a gold loan?
The list of gold loan documents is limited to just proof of identity and proof of address. To avail of a gold loan you just need any one of your basic KYC documents for gold loan like:
- Aadhaar card
- Voter ID card
- Passport
- Driving licence
- NREGA job card
- Letter issued by National Population Registration
Who is eligible to apply for a gold loan?
Before applying for a gold loan, it is important to check if you meet the gold loan eligibility criteria. At Bajaj Finance, the eligibility criteria is easy to meet. You just need to meet the below parameters to begin your gold loan application :
- Age: You should be between 21 to 70 years old.
- Gold quality: You must have gold jewellery that is 18-22 karats.
- Citizenship: You have to be an Indian citizen to apply for a gold loan.
That is it! You do not need a high credit score to get this loan since it is secured against gold jewellery. With a gold loan, even homemakers, farmers, or small shop owners can get funds without trouble.
So, if you have gold jewellery at home and need funds, this is one of the easiest loans to get. Just bring your gold and KYC documents, and you are ready to go!
What are the benefits of gold loan?
- Low interest rate: It is important to remember that high-interest rates can lead to a higher repayment amount in the long run. With Bajaj Finance you can get a loan against your 18-22 karat gold jewellery with interest rates starting at just 9.50% p.a.
- High loan amount: Know the current market value of your gold to avoid borrowing more than necessary. Consider the per gram rate of gold, as it determines the amount you can borrow against your gold jewellery.
- Multiple repayment options: Look for lenders offering multiple repayment for gold loan schedules to suit your financial capabilities. You can choose to pay your loan interest monthly, bi-monthly, quarterly, half-yearly or annually.
- Security measures: We offer free insurance of gold to cover your pledged gold jewellery against theft and misplacement. With our comprehensive security measures to safeguard your pledged gold, your gold jewellery is kept safe in secure vaults with constant surveillance.
- No part-prepayment or foreclosure charges- We do not charge any additional amount for part-prepayment or foreclosure of your gold loan. In cases the Borrower closes the loan, interest on a pro-rated basis will be applicable.
Gold Loan Tenure: Understanding the Duration and Terms
A gold loan, also known as a loan against gold, is a secured loan where borrowers pledge their gold jewellery or ornaments as collateral to receive funds. Understanding the gold loan tenure is crucial to managing repayments effectively. The gold loan meaning encompasses the loan amount, interest rate, and repayment schedule.
Gold loan tenures typically range from a few months to a few years, depending on the lender's policies and the borrower's needs. To understand how does gold loan work, note that you can choose from multiple repayment options. You can opt to pay just the interest on monthly, bi-monthly, quarterly, half-yearly, or annually as per your convenience, with the principal amount repaid at the end of the tenure. This flexibility allows borrowers to select a repayment plan that best suits their financial situation and ensures that they can manage their commitments without undue stress. Understanding these aspects helps in choosing the right tenure for your gold loan.
Bajaj Finserv app for all your financial needs and goals
Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.
You can use the Bajaj Finserv App to:
- Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
- Invest in fixed deposits and mutual funds on the app.
- Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
- Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
- Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
- Shop from over 100+ brand partners that offer a diverse range of products and services.
- Use specialised tools like EMI calculators, SIP Calculators
- Check your credit score, download loan statements and even get quick customer support—all on the app.
Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.
Frequently asked questions
Gold Loan is a versatile financial tool with little restrictions. Whether it is gold loan for emergency, or any unforeseen expenses, gold loans can effectively address both planned and unplanned financial needs.
Bajaj Finance offers a gold loan tenure of up to 12-months, giving you the flexibility to prepay or foreclose the loan according to your preferences. You have the option to repay the loan interest on a monthly, bi-monthly, quarterly, half-yearly, or annually.
Opting for a gold loan over a personal loan offers several advantages. With a gold loan, you leverage your existing gold jewellery for quick funds without the hassle of extensive documentation or stringent credit checks. Moreover, gold loan interest rates tend to be lower, making it a more cost-effective borrowing option.
To get the lowest gold loan interest rates, start by maintaining a good credit score and a solid financial profile, as lenders offer better rates to creditworthy borrowers. Opt for shorter loan tenures, which often come with lower rates. Additionally, check for any special promotions or discounts offered by lenders. Being an existing customer of a bank might also give you access to preferential rates. Ensuring all documentation is complete and accurate can further help secure the best rates.
