LOAN AGAINST GOLD

DEFINITION
Loan against gold is a very simple concept. By pledging your gold ornaments,
coins, biscuits, etc. the lender provides you with liquidity at a predetermined rate
of interest. Loans are sanctioned after scrutiny of basic documents and satisfactory
evaluation of the gold pledged.
The amount is then disbursed in the form of cash, demand draft or sometimes even
an account transfer. The whole disbursal process is quicker than personal loans,
with some lenders even promising disbursal.
 FEATURES
• Loan amount depends on banks to banks.
• Instant funds
• Get funds instantly against your gold, and repay at your own convenience
• Low Interest Rates
• Collateral Held Securely
• Any gold surrendered to us as collateral is kept safely in our locker, so you don't have to worry
about the safety or security of your gold.
• Quick and Efficient Servicing
• Over the counter disbursement in just 45 minutes* with minimal documentation
• Complete Transparency
• All the loan rates and charges are communicated up front in writing, along with the quotation, so
you don't have to worry about any hidden costs or fees.
EVALUATION OF GOLD
• The method followed to evaluate the gold pledged, may slightly vary from
lender to lender. But in general practice for all jewellery with the 'Hallmark'
sign, loans are sanctioned on the basis of the weight, purity and current
market value of gold.
• Lenders sanction on gold with a carat range of 18 to 24. The value or weight
of precious stones, if embedded in the gold jewels is disregarded. For any
jewellery without the 'Hallmark' sign, valuation may be unreliable and you
may end up with a lesser amount.
Particulars Citizen credit co- State Bank Of India Kotak Mahindra
operative Bank Bank
Need of account Yes Yes Yes

Amount sanctioned 75% of the gold Min- 20,000 Max- 20 Min- 25,000 Max- 25
on gold value lakhs lakhs
Interest Rate 11.5% 10.25% 10.5% - 17%
Documents • KYC Documents • KYC Documents • KYC Documents
• Income Slip/ last • Drawing Power • Letter of Pledge
3 years balance Note/ Delivery • No income
sheet/ tax returns Note documents upto
• Letter of Pledge • Illiterate person – 10 lakhs
Witness letter
• Arrangement
Letter by branch
Eligibility 18years and above 21 years and above 18 years and above
Demand, Term & Max- 24/ 36 months Demand Loan Term Loan Bullet
Overdraft Facility Max- 30 months (3/6/9/12 months)
Overdraft Facility • Interest payable
Max- 36 months on maturity
Term Loan EMI
(24/36 months)
 CONCLUSION
• For borrowers, gold loans have emerged as one of the best means of
raising quick, short-term capital. For lenders, gold loans are more
advantageous compared with home and car loans because of the
shorter tenures, lower processing time and cost, and greater returns
due to higher interest rates. These factors, along with appreciation in
value of gold, have led to an explosion in the gold loan market.
• Firms need to manage risks related to possible sharp fall in gold prices
and non-adherence of regulatory norms and also need to ensure that
physical assets are properly valued, stored and documented. Firms
need to invest in technology to better manage the increasing volumes
and to reduce risks. Provision of accurate real-time information will
lead to faster decision making and reduced turnaround time for loan
disbursals.