Gold Loan Eligibility and Documents
Gold loans are a popular financing option that allows borrowers to use their gold jewellery as collateral to get quick funds with minimal documentation and flexible terms. Understanding the eligibility criteria and documents required is essential to ensure a smooth loan application process.
Gold Loan Eligibility Criteria
Ownership of Gold:
You must own physical gold to pledge as collateral. The gold should ideally be jewellery or ornaments with a minimum purity of 18 to 22 karats, depending on the lender's policy.
Age Requirement:
The applicant should be a resident Indian aged between 18 to 70 or 75 years, varying by lender. Minors under 18 are not eligible for a gold loan.
Nationality and Residence:
Most lenders require the borrower to be an Indian resident.
Gold Purity and Weight:
The gold must meet minimum purity standards (usually 18-22 karats). The loan amount is based on the purity and net weight of the gold pledged.
Loan-to-Value (LTV) Ratio:
As per RBI guidelines, lenders can provide loans up to 75% of the current market value of the pledged gold.
Credit History:
Since gold loans are secured by collateral, credit history and income proof requirements are minimal or sometimes waived, making these loans accessible even to those with poor credit or irregular incomes.
Repayment Terms:
Gold loans typically have short repayment tenures ranging from 6 months to 3 years.
Documents Required for Gold Loan Application
To apply for a gold loan, borrowers generally need to submit the following documents:
Filled Application Form:
Completed and signed application form provided by the lender.
Proof of Identity (Any one):
Aadhaar Card
Passport
Voter ID Card
Driving Licence
PAN Card (mandatory in some cases, especially for loans above Rs. 5 lakh)
Proof of Address (Any one):
Aadhaar Card
Passport
Voter ID Card
Driving Licence
Recent Utility Bill or Bank Statement (in some cases)
Photographs:
Recent passport-size photographs as specified by the lender.
Income Proof (Sometimes):
While not always required due to the collateral nature of the loan, some lenders may ask for income proof to assess repayment capacity, especially for higher loan amounts.
Gold Jewellery:
The physical gold jewellery or ornaments to be pledged as collateral. It will be evaluated and appraised by the lender's expert.
How is the Loan Amount Calculated?
The lender assesses the market value of your gold based on current gold prices, purity, and weight measured by their appraiser.
The Loan-to-Value (LTV) ratio, generally up to 75%, is applied to the gold’s assessed value to determine the maximum loan amount.
The final sanctioning of the loan depends on the lender's policies and the borrower's profile.
FAQ – FREQUENTLY ASKED QUESTIONS
What is the minimum age to apply for a gold loan?
You must be at least 18 years old to apply, and usually the upper age limit is between 70 and 75 years.
Is income proof mandatory for a gold loan?
Income proof is generally not mandatory since the loan is secured against gold. However, some lenders may request it for larger loan amounts.
What types of gold are accepted for gold loans?
Most lenders accept gold jewellery and ornaments with purity ranging from 18 to 22 karats. Gold coins or bars may not always be accepted.
How much loan can I get against my gold?
According to RBI guidelines, lenders can provide up to 75% of the market value of your pledged gold.
What documents do I need to submit for a gold loan?
You need to submit a filled application form, identity proof, address proof, recent photographs, and the gold jewellery for pledging.
Can I apply for a gold loan online?
Many lenders offer online applications where you can submit documents digitally and get quick approval.
Does my credit score affect gold loan eligibility?
Generally, no. Since gold loans are secured, credit scores have little impact on eligibility.
Published on: July 24, 2025
Published by: PAVAN
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