Gold Loan Procedure - Minemi

Gold Loan Procedure: How to Get a Gold loan

Unlock the potential of your gold for quick nancial needs. This guide explains the gold loan process, available schemes, and how to choose the best option from banks like SBI, HDFC, and Canara Bank.

Introduction to Gold Loans

A gold loan is one of the fastest and easiest ways to access funds by leveraging the gold you already own. Whether for medical emergencies, business needs, education, or weddings, a gold loan provides instant liquidity without selling your assets.

Banks and Non-Banking Financial Companies (NBFCs) oer loan amounts up to 75% of the gold’s value, with exible repayment options and competitive interest rates. With minimal paperwork and quick disbursal,gold loans have become a popular choice for short-term nancial requirements.

Why Consider a Gold Loan?

Quick Processing: Get funds within hours of applying.
Lower Interest Rates: Compared to personal loans, gold loans oer interest rates starting at 7.25% p.a.
No Credit Score Dependency: Approval depends on gold value, not credit score.
Flexible Repayment Options: Choose from EMI, bullet repayment, or overdraft schemes.
Multipurpose Loan: Use the funds for any purpose – education, weddings, medical expenses, or business expansion.

Step-by-Step Gold Loan Procedure

1. Choose the Right Lender

Gold loans are oered by:

Banks – SBI, HDFC, Canara Bank, ICICI Bank
NBFCs – Muthoot Finance, Manappuram Finance, Rupeek
Cooperative Banks and Local Lenders
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MinEmi Tip

Choose banks for lower interest rates and NBFCs for faster disbursal with minimal documentation.

2. Application Process

There are three ways to apply for a gold loan:

Online: Apply through bank websites like HDFC or ICICI or NBFC platforms like Muthoot. Schedule an appointment for gold pickup or visit the branch.
Branch Visit: Walk into any branch with your gold and necessary documents. Get the loan processed immediately after valuation.
Doorstep Service: NBFCs like Rupeek and Muthoot provide home services where gold is collected, appraised, and the loan is disbursed directly to your account

3. Gold Evaluation and Loan Sanction

Purity Check: Lenders evaluate gold for purity (measured in karats).
Weight and Value Assessment: Gold is weighed, and the loan amount is determined based on the current market price.
Loan Amount: You can get up to 75% of the gold’s value as per RBI regulations.

Example:

If the gold price is ₹5,500 per gram and you pledge 100 grams, the maximum loan amount could be ₹4,12,500.

4. Loan Disbursal

Once the evaluation is complete, the loan is disbursed through:

Bank Transfer
Cheque
Cash (for smaller amounts)

Most banks and NBFCs provide the loan amount within a few hours.

Gold Loan Schemes and Repayment Options

1. Bullet Repayment

How It Works: Pay the interest monthly or quarterly and repay the principal at the end of the tenure.
Best For: Short-term nancing of 3 to 12 months.
Example: An entrepreneur took a ₹5 lakh bullet loan for 6 months from SBI to manage cash ow. He paid ₹4,000 monthly interest and settled the entire ₹5 lakh at the end of the tenure.
Oered By: SBI, ICICI Bank, Canara Bank, Muthoot Finance.

2. Overdraft Gold Loan

How It Works: Interest is charged only on the utilized amount. You can withdraw funds as needed, repay, and reuse the credit limit.
Best For: Businesses and individuals with uctuating cash ows.
Example: A trader pledged gold worth ₹8 lakh at HDFC Bank. He withdrew ₹3 lakh to buy inventory and repaid within 2 months. Interest was charged only on the ₹3 lakh for 60 days.
Oered By: FC Bank, ICICI Bank, SBI.

3. EMI Gold Loan

How It Works: Fixed monthly installments cover both principal and interest.
Best For: Salaried professionals preferring structured repayment.
Example: A salaried individual took a ₹2 lakh gold loan from Canara Bank for his child’s education, opting for a 12-month EMI at ₹18,000 per month.
Oered By: nara Bank, Axis Bank, Union Bank.
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Trusted Expert Quote

“Gold loans are a lifeline during emergencies. Opt for bullet repayment if you expect inow within months or overdraft schemes if you need exibility,”-Rajan Sharma, Financial Advisor at ICICI Bank

Gold Loan Comparison (Top 10 Banks and NBFCs in India):

Gold Loan Comparison Table

Bank/NBFCInterest RateMax TenureLoan TypeProcessing Fees
SBI7.25% p.a.36 monthsBullet/EMI/Overdraft0.5%
HDFC Bank7.5% p.a.24 monthsEMI/Bullet1%
Canara Bank7.35% p.a.24 monthsEMI/Bullet0.5%
ICICI Bank8% p.a.36 monthsOverdraft/Bullet1%
Muthoot Finance8.5% p.a.12 monthsBullet/EMI1%

Minemi’s Tips to Maximize Gold Loan Benefits

Opt for Overdraft Facilities to minimize interest costs during surplus periods.
Negotiate processing fees to lower upfront costs.
Compare rates from multiple lenders to find the best deal.
Repay early to reduce overall interest.
Conclusion

Gold loans oer quick liquidity and exibility, but selecting the right scheme is crucial. By comparing interest rates, tenure, and repayment options from top banks and NBFCs, you can make the most informed decision.

Explore and apply for the best gold loan with Minemi today.

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