Q1. What is a gold loan? It is a personal loan secured against the gold ornaments/coins which a customer pledges with the bank. The loan amount can be utilized for personal / business & any other non-speculative & for approved purposes. Gold loans have successfully enabled thousands of people to mobilize their personal assets, which would’ve otherwise simply been kept away in a locker. Q2. What is the tenure for gold loans? Gold loans are available for a period ranging from a minimum of 6 months to a maximum of 36 months. Q3. What loan amount is available for gold loans? The loan amount for gold loans differs with respect to various banks and NBFCs.  So on a broad basis, one can get a loan amount ranging from a minimum of Rs. 1000 to a maximum of Rs. 1 crore. Q4. Is there any margin for gold loans? Yes, there is a margin of 20% to 25% in gold loans charged by various banks. The margin percentage may differ from banks to banks. Q5. What type of gold can I pledge to avail the gold loan? You can pledge any type of gold jewelry/gold ornaments which are 18 carats and above in purity. This includes items such as necklaces, rings, bracelets, watches, ‘Polki’ sets, pendants, ‘Kardahs’, etc. However, the bank does not accept ornaments such as “Mangalsutra”, “Thali”, “Raksha”, Kodi”, “Karimanimala”, “Gold Statues” & “Gold wrist watches” Q6. Can I get Gold Loan against gold coins? Yes, you can avail gold loans by pledging gold coins with a maximum cap of 50 grams per person. Q7. What type of security do I need to provide? Do I need a guarantor? The only security which is required from the customer’s end in order to avail a gold loan is the gold they will pledge. There is no need for an external/third party guarantor for the same. The loan will be sanctioned against the gold pledged. Q8. How will the gold be valued? The approved gold jewel appraiser of the bank or the NBFC will verify the purity of the gold and also ascertain the exact weight, and then the gold will be valued accordingly. Q9. Will my gold be safe? Yes, there is no need to worry about the safety of your gold, when taking gold loans, as banks and NBFCs take proper and adequate security measures for keeping your gold safe. Q10. At what rate of interest do banks provide Gold Loan? Gold loans are available at low-interest rates which is its major advantage. Usually, loan over gold is provided in the interest of 12-16% per annum and this is quite low compared to personal loans available at interest rates of 15-26% per annum. Q11. What happens if the loan amount is not repaid on the due date? In case the loan amount is not repaid on or before the due date, the penal rate of interest is liable to be charged on the loan amount from the due date of the loan. Q12. How can I repay my loan? What different options are available for the repayment? You can repay your loans either by cash or cheque. (Credit/debit cards and demand drafts are not accepted). Q13. Can I foreclose the loan earlier? Yes, you can foreclose your loan anytime when you wish to do so. You can do it after 1 or 1 and ½ months. For more information, you can contact your bank or your NBFC. Q14. Will gold loan affect the CIBIL score? Yes, taking a gold loan will definitely affect your CIBIL score. Earlier gold loans were considered a negative mark on your CIBIL report as only those individuals who do not get loans from any other medium opt for gold loans. However, today this thing is considered irrelevant to the increasing awareness amongst people and the advantages that gold loan offers. So in case, you happen to take a gold loan then remember to pay the EMIs on a timely basis and adhere to the terms and conditions. This will help you to boost your CIBIL credit score. Q15. What are the things that people should keep in mind while taking a gold loan? The most important things that are to be kept in mind while taking a gold loan are transparency, security, and choice of loan product to suit the customer’s requirement. Transparency would include that the customers get the return for which he pays. Security arrangements by the banks and the NBFCs for the gold pledged by you. And the choice of loan product includes various things like Loan to value ratio, interest rates etc.