Looking for quick credit without heavy paperwork? A gold loan is one of the fastest secured loan options in India. With minimal documentation, same-day approval, and flexible repayment methods, it’s often the go-to choice during emergencies, business needs or personal expenses.
This guide explains:
- What a gold loan is
- Latest interest rates in India
- Top banks and NBFCs offering gold loans
- How lenders evaluate your gold
- Step-by-step process to apply online
- Charges, safety tips, and FAQs
What is a Gold Loan?
A gold loan (also called a loan against gold or jewellery) is a secured loan where you pledge your gold
ornaments or coins as collateral. In return, the lender provides funds based on the value of your gold.
Because the loan is backed by a physical asset, lenders offer:
- Fast approvals
- Minimal documentation
- Competitive interest rates
Banks and NBFCs (like Muthoot Finance, Manappuram, IIFL, etc.) are the main providers.
Why Choose a Gold Loan?
- Quick disbursal: Many lenders approve and release funds on the same day.
- Low paperwork: Usually only ID and address proof required.
- Lower interest rates compared to unsecured loans.
- Flexible repayment options: EMI, bullet repayment, overdraft facility, partial prepayment.
Key Terms You Should Know
Loan-to-Value (LTV)
Percentage of the gold value that the lender offers as loan. In India, it is usually up to 75%, depending on gold purity and lender policies.
Tenure
Typically 3 months to 36 months.
Interest Rate
Ranges from 8% to 20%+ per annum, depending on lender, loan amount and scheme.
Gold Loan Interest Rate Range in India (2025)
Most banks/NBFCs offer interest rates starting around 8%–10% p.a., and going up to 20%+ for small-ticket or short-term loans. Always check the latest rate card.
Top Gold Loan Providers in India (Banks & NBFCs)
Major Banks
- State Bank of India (SBI) – Large branch network, reliable, competitive rates.
- HDFC Bank – Fast processing, flexible repayment.
- ICICI Bank / Axis Bank / Kotak Mahindra / IndusInd – Strong digital process & quick approval.
NBFCs & Digital Lenders
- Muthoot Finance – India’s largest gold loan NBFC; fast payouts.
- Manappuram Finance – Competitive rates, doorstep services in many cities.
- IIFL / Bajaj Finserv / Rupeek – Digital-first lenders with home pickup & fully online flow.
Gold Loan Interest Rates & Charges – Quick Table
| Lender | Interest Rate (p.a.) | Min Loan | Processing Fee |
|---|---|---|---|
| SBI | ~8.75% onwards | ₹20,000 – ₹50 lakh | ~0.50% approx. |
| HDFC Bank | 9.30% – 17.86% | From ₹25,000 | ~1% + GST |
| ICICI Bank | 8.75% – 16.75% | From ₹2 lakh | ~1% or fixed fee |
| Bank of Maharashtra | ~8.75% onwards | From ₹20,000 | Zero fee for loans up to ₹10 lakh |
| Kotak Mahindra Bank | 9.00% – 24.00% | ₹20,000 – ₹1.5 crore | Up to 2% + GST |
| IIFL Finance | 11.88% – 27% | From ₹3,000 | Processing + MTM charges |
How Lenders Evaluate Your Gold
- Purity test: Checks the karat (22K, 18K, etc.).
- Weighing: Only gold content is considered; stone weight deducted.
- Market price: Based on current gold rate per gram.
- LTV applied: Determines final loan value.
How to Apply for a Gold Loan Online (Step-by-Step Guide)
1. Check eligibility online
Use the lender’s website or aggregators to compare rates & EMIs.
2. Start the online application
Fill in details like name, mobile, PAN/Aadhaar, city, estimated gold weight.
3. Upload documents
Usually required:
- Aadhaar card
- PAN card
- Address proof
- Bank details
4. Book valuation (branch or home pickup)
- Banks usually call you to the branch.
- Digital lenders offer home valuation & pickup in sealed packets.
5. Final approval
You receive the sanction letter with loan amount, interest rate, and tenure.
6. Disbursal
Money is transferred instantly via NEFT/IMPS after completing paperwork.
Example: Online Application Flow
SBI Gold Loan
- Visit SBI’s gold loan page → Apply Online → KYC → Branch visit → Valuation → Sanction → Disbursal.
Muthoot Finance
- Start online → Choose home pickup or branch → Instant valuation → Same-day disbursal.
Charges to Check Before Applying
- Processing fees
- Storage/handling charges
- Insurance charges
- Prepayment/foreclosure penalties
- Late payment fees
Safety Tips for Borrowers
- Confirm LTV and valuation method.
- Check vault storage and insurance conditions.
- Keep pledge receipt safely.
- Understand interest calculation (daily/monthly compounding).
- Compare APR, not just interest rate.
FAQs
Q1: Can I pledge studded jewellery?
Yes, but stones/wastage won’t be counted for valuation.
Q2: How fast is the online gold loan process?
Most digital lenders offer same-day disbursal.
Q3: What happens if I miss payments?
Lenders may auction gold after giving notice. Always communicate early.
Q4: What documents are needed?
Aadhaar, PAN, address proof, and bank details.
Final Checklist Before Applying
- Estimate gold weight & purity
- Compare interest rates, LTV, fees
- Keep KYC documents ready
- Choose home pickup or branch visit
- Read the sanction letter carefully
Conclusion
A gold loan is one of the most efficient ways to access quick, secure credit with minimal documentation. Banks offer stability and competitive interest rates, while NBFCs and digital lenders provide speed and convenience. Always compare the effective cost, the LTV, and service quality before pledging your gold.
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