What Is a Gold Loan?
A Gold Loan is a secured loan where borrowers pledge their gold jewelry or coins as collateral to obtain funds quickly. Gold loans are one of the fastest ways to get short-term funds in India.
In 2026, gold loans are widely available at banks, NBFCs, and digital lenders, often with instant approval.
Key Features of Gold Loans
- Quick disbursal, often same day
- Low-interest rates due to secured nature
- Flexible repayment tenure (short-term)
- No end-use restrictions
- Loan amount based on gold valuation and purity
Gold Loan Interest Rates 2026
Interest rates vary based on lender, gold purity, and loan tenure.
| Lender Type |
Interest Rate (p.a.) |
Loan Amount |
Tenure |
| Public Sector Banks |
7.50% – 12.00% |
Up to ₹50 lakh |
3–36 months |
| Private Banks |
9.00% – 15.00% |
Up to ₹1 crore |
3–24 months |
| NBFCs & Digital Lenders |
10.00% – 24.00% |
Up to ₹2 crore |
1–24 months |
Eligibility Criteria for Gold Loans
- Applicant must be an adult (18+)
- Valid identity and address proof
- Gold must be of acceptable purity and quality
- Good repayment history (for repeat loans)
Documents Required
- Identity proof (Aadhaar, PAN, Passport)
- Address proof (Utility bills, Voter ID)
- Ownership of gold
- Bank account details for disbursal
Gold Loan EMI Example
If you pledge gold worth ₹5,00,000 at 12% interest for 12 months:
- Monthly EMI: ₹44,667 (approx.)
- Total interest payable: ₹36,000 (approx.)
- Total repayment amount: ₹5,36,000 (approx.)
Advantages and Disadvantages
Advantages
- Instant funding
- Low interest due to secured nature
- Short-term flexibility
- No end-use restriction
Disadvantages
- Gold is at risk if default occurs
- Short repayment tenure may create pressure
- Interest may be higher at NBFCs for small loans
How to Choose the Best Gold Loan in 2026
- Compare interest rates and processing fees
- Check loan-to-value ratio
- Review repayment flexibility
- Ensure gold safety and proper storage by lender
- Read terms & conditions carefully
Frequently Asked Questions (FAQs)
Can I get a gold loan without a bank account?
Most lenders require a bank account for disbursal.
Is gold insurance mandatory?
Some banks and NBFCs include insurance for pledged gold.
How fast can I get a gold loan?
Funds can be disbursed same-day or within 24 hours in most cases.
Can I repay early?
Yes, prepayment is usually allowed without major penalties.
Author: All Finance Store Gold Loan Team
Expertise: Short-Term Secured Loans
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Gold loan terms, interest rates, and eligibility vary by lender. Always verify details with official sources before applying.