Maximum And Minimum Gold Loan Limit In India

Gold Loan has become one of the fastest-growing services compared to other products. Read on to know minimum & maximum gold loan limit in India!

7 Oct,2022 18:51 IST 3937 Views
Maximum And Minimum Gold Loan Limit In India

Gold signifies wealth and prosperity in Indian culture. Purchasing gold on specific auspicious occasions is a custom. People bought a small amount of gold on every occasion. Collectively, it amounts to a lot due to years of accumulation. Passing down the gold to the next generation was yet another sentimental custom.

Getting gold products in gifts was considered a blessing. Traditionally, gold ornaments only symbolised the blessings that ancestors were passing through these ornaments. But looking at the security gold provided, it wouldn’t be wrong to say that the ancestors were passing on financial security to the next generation in the form of gold.

Gold has been used as a mortgage to take loans in need for centuries. Zamindars and Saavkars would provide liquidity against gold ornaments and artefacts. Today, banks supply the same aid. The Gold Loan has become one of the fastest-growing services compared to other financial products.

Many reputed banks/NBFCs accept gold objects such as gold jewellery and ornaments as security to provide loans. The loan amount one can acquire against a gold item varies depending on the purity of the gold in the jewellery, the LTV Ratio, and other internal lender limitations.

Because both banks and NBFCs offer gold loan services, comparing their rates, qualifying conditions, and loan amounts are vital. Every lender may have a predetermined minimum and maximum gold loan limit. To illustrate with an example, ICICI Bank sanctions gold loans ranging from Rs 10,000 to Rs. 1 crore, whereas SBI provides gold loans ranging from Rs.20,000 to Rs.50 lakh.

Let us look at the following table to know the minimum and maximum gold loan amounts offered by various banks in India.

Bank / NBFC

Minimum Amount

Maximum Amount


Rs 10,000

Rs 5 Cr


Rs 10,000

Rs 5 Cr

Yes Bank

Rs 10,000

Rs 5 Cr

Mannapuram Finance

Rs 3,000

Rs 1 Cr

Muthoot Finance

Rs 3,000

Rs 1 Cr

SBI Bank


Rs 50 lakhs

Canara Bank

Rs 5,000

Rs 20 lakhs

Axis Bank

Rs 10,000

Rs 5 Cr

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Factors To Consider For Gold Loan Application

1. Requirement Of Documents

The only documents required for gold loan application are identity proof, address proof, and recent passport-sized photos. Banks and NBFCs might have additional document requirements to add a layer of protection, but most institutions do not require extensive documentation.

2. Loan Amount Limitations

The gold loan amount is determined by estimating the value of the gold via purity and weight. You can use gold loan calculator to calculate gold loam amount against gold weights. Every financial institution has a sanctioning limit and can offer loans within the permissible range only. Although, higher limits are allowed only in special cases. For such high amounts, special permissions from the management are mandatory. The management agrees with the higher loan amount only if the borrower has a positive repayment record.

3. Gold Valuation

The value of gold is determined based on the weight and purity of the gold. A gold loan amount sanctioned is up to 90% of the market value of the gold mortgaged. The loan-to-value ratio, in this case, is capped by the Reserve Bank of India.

4. Reclaim

There is no restriction on the number of times a gold ornament or any other form of gold can be mortgaged. This facility enables the borrower to take credits over and over on a single piece of gold. Also, this feature only applies to gold loans and not other personal or business loans. The borrower does not have to change the Bank or NBFC to reclaim the loan.

5. Flexible Repayment Options In Gold Loan

With various repayment options available for gold loans, the adaptability to reimburse the principal amount and interest in various forms is advantageous. The feature encourages entrepreneurs and small company owners who fall short on cash to choose gold loans over other business loan options, which consist of high monthly EMIs and rigid repayment schemes. Each Bank or NBFC has its unique policy for gold loan repayment options and borrowers must read and understand the terms and conditions of repayment before applying for the loan.

Apply For A Gold Loan With IIFL Finance

With IIFL, avail all the benefits of gold loan services. The documentation of IIFL consists of ID proof and address proof. The smooth operational system of IIFL makes the process of gold loans easy. IIFL approves a loan of the minimum amount of Rs 3,000 and the maximum amount of up to Rs 50 lakhs. To apply for gold loan visit our branch or opt gold loan at home service


Q.1: What is the margin in a Loan against Gold at IIFL?
Ans: Typically, every bank or NBFC maintain a margin of at least 25% in the case of loans against gold. The margin implies that an individual can avail of a maximum of 90% of their gold’s market value as the loan amount. For example, if the valuation of gold is Rs. 1 Lakh in the market, then IIFL will offer you a maximum loan amount of Rs. 90,000.

Q.2: What Documents do I need to apply for Gold Loan at IIFL?
Ans: Basic KYC documents such as identity proof, address proof and two photos of the applicant are mandatory at all the IIFL branches to avail loan.

Q.3: What happens if an individual cannot repay their loan amount?
Ans: Bank/NBFCs will provide periodic reminders to the customer about the payment after the end of the tenure. After that, they deliver a final notice to the customer via call or message about the auction. Lenders can then sell the deposited gold in an auction.

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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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