Maximum And Minimum Gold Loan Limit In India

Gold loan is a secured and collateral type of loan, where a lender pledge the gold from the borrower and provide them loan. Read to know about the maximum and minimum limit for gold loan.

16 Sep,2022 09:49 IST 61
Maximum And Minimum Gold Loan Limit In India

Gold has been a household metal in India since time immemorial. It is used as a security asset and has proven to be a saviour in times of need. According to a survey conducted by the India Gold Policy Centre (IGPC) at the Indian Institute of Management, Ahmedabad (IIM-A), more than 75% of Indian households agreed on owning gold in some form or other.

This article elaborates on gold loans and their minimum and maximum limit in India.

What Is A Gold Loan?

A gold loan is a secured loan where you borrow money against the security asset–your gold jewellery/ornaments. You pledge your gold items to avail of the required funds in a gold loan. These loans are best suitable for shorter-term fund requirements.

What Are The Eligibility Criteria For A Gold Loan?

While gold loans are easy and quick, there are a few eligibility criteria that you need to know:

  • Your minimum age should be 18 years. The maximum age depends from lender to lender.
  • You should be a salaried, self-employed, business owner, farmer, trader etc.
  • Your gold items must be in the purity range of 18 to 24 carat. If it’s a minted gold coin, it should be 22 carats.
  • You need to submit your identification documents like Aadhar Card, Pan Card, Utility bills, and any other as prescribed by the lender for KYC verification.

What Is The Minimum and Maximum Limit To Avail Of A Gold Loan In India?

You can avail of gold loans in India from an NBFC or a bank at an interest rate of 7-29%. The loan amount depends on the gold pledged quality and the Reserve Bank of India (RBI). RBI permits 75% of the pledged gold to sanction as the loan amount.

While there is not a minimum limit on the gold loan, you can avail of a maximum loan of up to INR 1.5 crore with a repayment tenure ranging between one month to 4 years, depending on the lender.

Frequently Asked Questions

Q.1: What are the minimum and maximum gold loan limits in India?
Ans: While there is not a minimum limit on the gold loan, you can avail of a maximum loan of up to INR 1.5 crore with a repayment tenure ranging between one month to 4 years, depending on the lender.

Q.2: Why should one opt for a gold loan?
Ans: A gold loan is beneficial in case of short-term fund requirements. It is a quick and easy way to fulfill your short-term and small economic needs.

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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