Busting Myths About Digital Gold Loans
Much like anything else in the world, gold loans are prone to misconceptions, too. Read to know the common myths on Gold Loans!

Digital gold loans allow a person to avail a loan against their gold, either in the form of jewellery or coins, from the comfort of their home without having to visit a bank or the office of a non-banking finance company (NBFC).
The popularity of digital gold loans spiked during the COVID-19 pandemic, when movements were restricted due to lockdowns across the country, and the need for funds was greater.
Digital gold loans can be classified into two broad categories based on the process of application and the nature of the collateral.
Digitised Gold Loan:
This is related to the process of availing a loan through an online application. The borrower can apply online for a loan against their gold jewellery or coins and request for a lender’s representative to visit their desired address at a convenient time for evaluation and verification. The representative evaluates the jewellery and completes all the formalities at the borrower’s home, takes the jewellery for storage and then ensures the loan amount is disbursed digitally directly to the customer’s bank account.Loan Against ‘Digital Gold’:
This pertains to a loan against ‘digital gold’, which is a certified digital note that states a person owns a defined amount of gold even if they don’t physically possess the asset. There are several myths surrounding digital gold loans. Let’s clarify a few of those.Myth: It Is A Lengthy Process
Getting a digital gold loan is a fairly easy and quick process if the necessary documents are in place. Once the short and simple application form for the gold loan is submitted to the lender along with the requisite documents, the lender will then quickly process the application and send a representative to the desired address at a convenient time for evaluation of the gold and verification of documents.
After completing all formalities, the executive will send a request for the loan to be disbursed to the borrower’s bank account.
Requires A Long List Of Documents:
Gold loans are considered secured assets as they involve the submission of collateral in the form of gold jewellery or coins. Therefore, they require minimal documentation for approval. Apart from an ID proof and proof of residence, no other documentation is needed to avail digital gold loans Any of the following documents can be submitted along with the online application to take a gold loan.• PAN card
• Aadhaar card
• Valid driving license
• Valid voter ID card
• Valid passport
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Digital gold loan offers all advantages of loans obtained from a branch of a bank or non-banking finance company but from the comfort of your own home.
Once a certified representative of the lender collects and submits the documents and processes the loan, he also ensures that the submitted gold asset is kept in secure vaults that are under constant surveillance. This ensures there is absolutely no danger of theft or any damage to the gold jewellery.
Some lenders also provide free insurance cover on the gold.
Myth: Need To Submit The Gold For Evaluation
The evaluation of the gold asset will be conducted by the lender’s appointed executive at the borrower’s address and the gold will not be handed over till the loan is approved. All appropriate receipts and paperwork will be provided by the executive before he steps out of the borrower’s home.
Myth: Need To Visit The Branch To Make Changes or Close The Account
Easy and seamless application at one’s doorstep is just one of the advantages of a digital gold loan. Borrowers can also enjoy several other facilities. They can:• View information about all open and closed loans online
• Obtain a top-up loan and have it deposited into their account
• Avail online loan account renewal
• Update or add their bank account information without going to a branch
• Pay dues conveniently online
• Access and download account statement
• Make a request online to close the account and get the gold back on completion of the loan repayment.
Conclusion
There is a large unregulated market of pawn shops and small-time moneylenders across the country that offer gold loans. However, to secure one’s precious gold jewellery the borrower must choose a credible lender like IIFL Finance while taking out a gold loan.
Digital gold loans, with their trail of digitised documents and receipts, provide an added later of security to the transaction.
Digital gold loans taken from reputed and experienced lenders such as IIFL Finance ensure that borrowing against gold is an easy and convenient process that can be completed online within a few minutes.
Even as the process is digital, one need not worry about the safety of their submitted gold jewellery. The gold is stored securely in secret vaults that are guarded at all times with the latest in surveillance technology. Some lenders, like IIFL Finance, also provide free insurance cover on the gold.
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Apply NowDisclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.