Gold loan
Also called Loan against gold jewellery
A loan against your gold jewellery or coins, which the lender holds until you repay.
A gold loan turns jewellery sitting in a locker into quick cash, without selling it. The lender keeps the gold as security, so it often leans less on your credit score. The catch is simple: if you don’t repay, the gold can be auctioned.
Read the rules and the real cost in Gold loans: the real cost, and RBI’s new rules.
Questions people ask
How does a gold loan work?
You hand over gold jewellery or coins to a bank or lending company. It values the gold, lends you a share of that value, and keeps the gold until you repay in full. Under RBI rules, it must then return the gold within seven working days.
How much can I borrow against my gold?
RBI caps it by loan size: up to 85% of the gold's value for loans up to 2.5 lakh rupees, 80% up to 5 lakh, and 75% above that. For a loan repaid in one go at the end, the interest due counts inside that cap.
What happens if I do not repay a gold loan?
After giving you notice, the lender can auction the gold. The reserve price must be at least 90% of its current value. The lender keeps what you owe, and must refund any surplus to you within seven working days.
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