Gold Loan Eligibility Criteria and Documents: List of Documents, Key Factors

Check gold loan eligibility criteria which need to be meet to avail loan at IIFL Finance. Want to know the complete eligibility process details? Read more!

25 Jan,2024 04:58 IST 1488
Gold Loan Eligibility Criteria and Documents: List of Documents, Key Factors

In Indian households, gold has traditionally been accumulated as jewellery and a security that can be sold and used in hard times. However, as additional ways to monetize gold have emerged over time to support other requirements too such as financing a dream wedding, a family vacation, or funding for educational needs. One of these options is a gold loan, which is a secured loan obtained by a borrower from a bank or non-banking financial institution by pledging their gold to the lender as collateral.

The lender temporarily holds the gold jewellery and uses it as collateral to secure the loan. After the borrower has paid back the borrowed money, the jewellery is returned to them. Similar to a mortgaged loan, a gold asset that belongs to the borrower must be pledged as security with the lender. However, it typically lasts for a shorter period, usually between six and 24 months.

It is not difficult to obtain this kind of financing because it is a secured loan. Two key elements of the procedure are the documentation and the evaluation.

Gold is not only a precious metal with cultural significance in India, but also a valuable financial asset that can be used to obtain quick and easy loans. Many Indians opt for gold loan when they need money for emergencies or opportunities, as they offer faster processing and lower interest rates than personal loans. However, before applying for a gold loan, it is important to understand the eligibility criteria that lenders look for.

Gold Loan Eligibility Criteria Required at IIFL Finance

IIFL gold loans offer the highest level of benefits to customers while promising to keep their gold safe. The gold loan eligibility calculator on the IIFL website helps you understand your gold loan eligibility against your gold jewellery.

The amount of any gold loan offered by a lender will be determined by the total weight of the gold. For the maximum loan amount, the jewellery must be made of gold that is purer than 18 karats. It should be noted that while calculating the overall weight of the gold ornaments, other additions such as stones, gems, diamonds, etc. are typically not taken into account. Only the gold content of the ornament will be determined.

The result will display the eligible gold loan amount based on the market value of gold at that time, along with the interest rate and loan tenure, based on your desired loan amount.

List of gold loan eligibility criteria for an IIFL gold loan include

Person Age 18 - 70
Gold Purity 18 -22 Carats
LTV Ratio Maximum 75%of gold value

Documentation Required To Meet Gold Loan Eligibility Criteria

The borrower must also present some gold loan document to prove their identification and eligibility for the loan in addition to any gold jewellery to be submitted as collateral.

1. Identity proof: PAN Card or driving license or passport or Voter’s ID Card or Aadhar card

2. Address proof: Voter’s ID or Aadhar Card or Rental Agreement or Utility Bills or Bank Statement

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Key Factors to Consider for Gold Loan Eligibility in India

  1. Ownership of Gold: The basic requirement for a gold loan is that you have gold in your possession in the form of jewellery. The gold should not be pledged to any other entity. The amount of gold you have will determine the maximum loan amount that you can get.

  2. Age Criteria: Another criterion for a gold loan is that you should be at least 18 years old, which is the legal age to enter into a contract. However, some lenders may have different age limits, depending on their policies. You should check the age criteria of the lender before applying for a gold loan.

  3. Identity and Address Verification: You also need to provide valid proof of identity and address to verify your credentials. These documents include Aadhaar cards, PAN cards, voter IDs, passports, driver's licenses, and ration cards. These documents help the lender verify your identity and address.

  4. Loan Amount Determination: Another important factor affecting your gold loan eligibility is the value of the gold you submit as collateral. The lender will evaluate the purity of the gold, the current market rates, and their own loan-to-value (LTV) ratio policy to calculate the loan amount. The LTV ratio is the percentage of the gold value that the lender is willing to lend. Usually, the LTV ratio ranges upto 75%.

  5. Credit History Consideration: One of the main benefits of gold loans is that they are based on collateral, which means your credit history is not a major factor. Even if you have a low credit score, you can still get a gold loan as long as you have some gold assets to pledge. Your credit history does not affect your eligibility or interest rate in this case.

  6. Repayment Capacity Evaluation: While your credit history may not matter much, lenders still want to ensure you can repay the loan on time. To determine whether you can pay the monthly installments, they will look at your income and spending. You should present some paperwork, such as salary slips, bank statements, and income tax returns, to establish your income.

  7. Loan Tenure and its Impact: Gold loans are meant to be short-term loans, with gold loan tenure ranging from a few months to a few years. You should be able to repay the loan within the specified period to avoid any penalties or loss of your gold. The shorter the tenure, the lower the interest rate and the higher the loan amount.

Using A Gold Loan Eligibility Calculator

While planning to apply for a gold loan, it is vital to understand the required gold jewellery for the loan amount you need. This is where the IIFL Finance gold loan eligibility calculator will prove helpful and it is easy to use. Follow these steps to determine your eligibility:

  • Visit the IIFL Finance website
  • Enter the required loan amount
  • Enter the weight of your gold jewellery in gms or kgs.
  • Enter your name, phone number and location.

Gold Loan Application Process

To seek a gold loan, the borrower needs to submit an application and the requisite documents to a bank or non-banking finance company, either online or by visiting a branch of a lender.

Typically, one does not require proof of income for a gold loan. Additionally, if a document includes both the applicant's address and identification evidence, no additional address proof is needed.

The lender confirms the information provided and also examines the weight and purity of the gold that will be held as security. After the quality and value of the gold are determined our IIFL representative will provide a quote of the eligible loan amount, interest rate and tenure. You can discuss the suitable gold loan scheme based on your requirements. Once Know Your Customer (KYC) gold loan process is completed, both financial institution and the customer agree on the loan amount and terms of the gold loan, including processing fees the loan amount is disbursed

Why Choose An IIFL Finance Gold Loan?

IIFL’s gold loan is your best bet owing to the following features:

  • Quick disbursal time
  • Low rate of interest as low as 0.99% per month
  • Minimal documentation
  • No CIBIL score required


Applying for a gold loan is easy, and there is little paperwork involved. Furthermore, the borrower's credit history has no bearing on the approval process, the amount or gold loan rate of interest charged.

These days there is a big unregulated gold loan market out there with local lenders and pawn shops. However, it is advisable to obtain a gold loan from a reputable lender like IIFL Finance as they offer a simple process and reasonable gold loan interest rate.

More importantly, lenders like IIFL Finance store the gold jewellery that has been pledged safely in vaults to eliminate any possibility of theft or damage. This guarantees that when borrowers repay their loans and close the account, their valuable asset will be returned to them safely.

The borrower's experience is hassle-free and entirely digital thanks to IIFL Digital Gold Loan product. In contrast to independent gold loan providers and the majority of banks, which still rely on customers visiting their branches, IIFL Finance has created a fully digital offering that brings the service directly to the customer's door.


Q1. Do you need a CIBIL score for a gold loan sanction?

Ans. No, a CIBIL score check is not a part of the gold loan process at IIFL Finance.

Q2. Can you prepay the gold loan without any penalties?

Ans. Yes. However, recheck for any prepayment penalties before applying for a gold loan with the respective financial institution.

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Disclaimer: 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.

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