What is the process of Gold Loan?

Learn how a gold loan process works. From pledging your gold, getting it evaluated for its value, to securing a loan quickly based on that value. It’s a simple and fast way to access the funds you need.
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Gold loan
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2 mins
17 May 2025

The rise of gold loans: A smart financing solution

The emergence of gold loans has gained momentum in recent years as a wise financing option. With the increasing value of gold, individuals can leverage their jewellery to secure loans at competitive interest rates. Gold loans offer quick disbursement, minimal documentation, and flexible repayment options, making them an attractive choice for urgent financial needs. Unlike traditional loans, the borrower's credit score is less critical, and the loan amount is based on the gold's value. This form of financing provides a practical and efficient solution for meeting personal or business expenses without liquidating valuable assets.

What is the gold loan process?

A gold loan is a secured loan where gold jewellery is pledged as collateral. The lender evaluates the gold's purity and weight to determine its market value, which forms the basis of the loan amount. Typically, you can get up to 75% of the gold's value as loan. The borrower must repay the loan, including interest, within the agreed tenure to retrieve the gold jewellery. Gold loans are popular in India due to their quick processing, minimal documentation, and flexible repayment options.

With Bajaj Finserv Gold Loan, you can get a loan starting from Rs. 5,000 to Rs. 2 crore, with interest rates starting at 9.50% p.a.

Step-by-step guide to the gold loan process

The process to avail of a gold loan is pretty straight forward:

  • Apply online: Fill in the online application form to book your appointment to the nearest gold loan branch.
  • Gold appraisal: On the scheduled day, visit the branch with your gold jewellery. The lender assesses the gold for purity and weight.
  • Loan offer: Based on the appraisal, the lender proposes a loan amount, generally up to 75% of the gold's value.
  • Documentation: You have to submit any one of your basic KYC documents for verification.
  • Loan approval and disbursement: Upon verification, the loan is approved, and the amount is disbursed, usually within 15 minutes*.
  • Repayment: The borrower repays the gold loan interest rate in chosen loan tenure. Though, it is important to note that the principal amount and pending interest, if any, will be due for payment at the time of loan maturity.
  • Gold retrieval: Once the loan is fully repaid, you can retrieve your pledged gold.

Documentation required for gold loan application

Applying for a gold loan requires minimal documentation, making the process swift and hassle-free. You only need any one of your basic KYC documents for gold loan, such as Aadhaar card, PAN card, passport, driving licence, NREGA job card or letter from the National Population Registration. The simplicity of the documentation process is one of the reasons gold loans are a preferred choice for quick financial assistance in India.

Eligibility criteria for gold loans

Gold loans are relatively easy to obtain due to their flexible eligibility criteria. The primary requirement is ownership of 18-22 gold jewellery. Any Indian citizen, aged between 21 to 70 years, can apply for a gold loan with Bajaj Finance. There is no strict criterion for credit score, making gold loans accessible to individuals with varying credit histories. Employment status is also not a major concern, as both salaried and self-employed individuals can apply. The value and weight of the gold determine the loan amount, with a maximum loan-to-value ratio usually capped at 75%.

Tips for a smooth gold loan application process

To ensure a smooth gold loan application process, consider the following tips:

  • Check eligibility: Ensure you meet the lender's eligibility criteria, including the required gold purity.
  • Organise documentation: Have all necessary documents, such as identity and address proof, ready for submission.
  • Understand terms: Thoroughly read and understand the loan terms, including repayment options and gold loan rate of interest.
  • Timely repayment: Plan your finances to ensure timely repayment, avoiding penalties and maintaining your credit score.

How to get the best interest rates on gold loans?

To secure the best gold loan rate of interest:

  • Opt for higher loan amounts: Larger loan amounts often come with lower interest rates.
  • Maintain a good relationship: Being an existing customer or having a strong repayment history can secure favourable rates.
  • Choose the right tenure: Opting for a shorter gold loan tenure can sometimes result in lower interest rates.
  • Pledge high-purity gold: Higher purity gold often qualifies for better interest rates.

By following these steps, you can maximise your chances of securing the best interest rates on your gold loan with Bajaj Finance.

Frequently asked questions

How is the value of my gold determined for a loan?
The value of your gold for a loan is determined by assessing its purity and weight. Lenders typically use a karat meter to check the gold's purity, which should be between 18-22 carats. The weight is measured precisely to calculate the total gold content. The market value of gold on the day of appraisal is then applied to determine the gold's worth. Generally, up to 75% of this value is offered as the loan amount.

How long does the gold loan process take?
The gold loan process is typically swift and efficient, often completed in as less as 15 mins*. Once you visit the lender with your gold jewellery, get your basic KYC documents verified and get the jewellery appraised. Upon verification and approval, the loan amount is disbursed into your bank account. The simplicity and speed of the process make gold loans a popular choice in India for quick financial assistance.

What happens if I default on my gold loan?
If you default on your gold loan, the lender has the right to auction your pledged gold to recover the outstanding loan amount, including interest and any applicable penalties. This means you will lose ownership of your gold. Additionally, defaulting can negatively impact your credit score, making it more challenging to secure future loans. Some lenders may also impose late payment fees or additional charges, further increasing your financial burden.

Can I get a gold loan immediately?

Yes, Bajaj Finance offers a quick gold loan process. Once your gold is evaluated, you can get approval and receive the funds often on the same day, ensuring fast access to the money you need.

What is the procedure for a gold loan?

To get a gold loan, you can either apply online via the Bajaj Finserv App or website or simply visit the nearest Bajaj Finserv Gold Loan branch. Your gold will be evaluated based on purity and weight, and the loan amount will be disbursed quickly, often on the same day.

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