Gold Loan Documentation Process

Learn how to simplify the documentation process for your gold loan with our quick guide. Find out what you need to prepare and submit for a hassle-free borrowing experience!

28 Mar,2023 12:42 IST 2598
Gold Loan Documentation Process

A gold loan is a secured form of credit that a borrower obtains from a bank or non-banking financial institution by pledging their gold jewellery, to the lender as security. The gold jewellery is temporarily held by the lender, who keeps it to guard against any default on the loan. The jewellery is returned to the borrower after repayment of the borrowed funds.

Many households have passive gold jewellery that they use only once in a few years on special occasions like a wedding. Therefore, it has become a popular source of raising funds by using the latent asset temporarily to tide over short-term needs for cash.

While all lenders accept gold jewellery as a form of security or collateral.

It must be noted that any lender who offers a gold loan will base the loan’s size on the total weight of the gold. The purity of the jewellery must be above 18 karats of gold to get the maximum loan amount. The weight of other items, such as stones, gems, diamonds, etc., is not usually included when determining the total weight of the gold ornaments. The ornaments' gold content will only be calculated.

Any adult who has gold jewellery is eligible to apply. As it is a secured loan, securing such credit is a smooth process. Documentation and evaluation are two important parts of the process.

Gold Loan Approval Procedure

The borrower first needs to submit an application form and the required documents to a bank or non-banking finance company. This can be done online or in person at the lender's branch.

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

The lender then verifies the information provided and examines the weight and purity of the gold that will be held as security. After the quality and value of the gold are assessed and the Know Your Customer (KYC) norms are verified, the financial institution and the customer agree on the loan amount and terms of the gold loan, including processing fees and tenure of the loan.

After this, the amount can be instantly deposited by the lender directly into the bank account of the borrower.

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What Documents Are Required?

While securing a gold loan is an easy process, just submitting the jewellery is not enough. Lenders follow strict procedures and conduct proper verification to avoid any kind of fraud. In addition to gold jewellery, the borrower also needs to provide certain documentation to prove their identification and eligibility for the loan. To apply for a gold loan, the applicant must submit the necessary paperwork to the lender such as:

• Aadhaar card.
• Identity proof—Any one of PAN card, passport, driving license or voter’s ID.
• Address proof—Any one of passport, driving license, electricity bill or gas bill.
• Proof of income—This is usually not a mandatory document required to avail a gold loan, but may give extra comfort to the lender and convince them of the borrower’s repayment capacity.
• PAN card details are usually not required to be submitted for gold loans. However, for large loans of over Rs 5 lakh, one may be required to furnish their PAN card.


Securing a gold loan is easy and does not require much paperwork. While there is a wide unregulated market out there, comprising local lenders and pawn shops, it is advisable to take a gold loan from a reputable lender like IIFL Finance, as they offer a hassle-free process, with attractive gold loan interest rates .

IIFL Finance also provides home service, wherein a company representative comes to the residence of the borrower to do a quick inspection and pick up the gold jewellery to be kept as a security.

The executive then approves instant bank credit into the account of the borrower. The borrower doesn’t need to visit the company’s branch—either for approval, repayment or taking the jewellery back at the end of the tenure—and can complete the entire process from the comfort of their home.

More importantly, IIFL Finance keeps the pledged gold jewellery safe in secure vaults so that there is no risk of theft or any damage. This ensures borrowers get their precious jewellery safely back after gold loan repayment and close the account.

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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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