How to Apply for 50K Gold Loan?

We have always heard that investing in gold is always the best option. Gold is a precious metal and its market value always keeps on increasing. When you buy gold you are investing in it. It is always beneficial when you take gold loans. A gold loan is when a borrower pledges their gold of good capital at a bank or a financial institution to take a loan against it. It is like proving collateral but the loan will be equal to the amount of the gold. 

This concept is very similar to the mortgage loan. If the borrower succeeds to pay back the loan then the bank gives them their jewellery back. But if the borrower defaults then he or she will have to let go of the gold. Then this jewellery will stay in the bank’s possession forever. To take a gold loan you will need to provide the bank with jewellery equal to the loan amount. For instance, if you want a 50k gold loan then you will have to provide the bank with jewellery amounting to 50K.

How does a Gold Loan work?

To approve a gold loan the bank will run a very intensive check on you and your jewellery. These checks will determine if you are eligible for the loan or not. There are three steps involved in a gold loan:

Detailed quality check:

When you approach a bank or a financial institute for a gold loan the first thing they would do is conduct a quality check on the gold. This is a very important process. Based on the purity of the gold, the bank will decide the amount of gold loan you will get. 

Know your customer or KYC:

After confirming the quality of the gold, the bank will also run a detailed background check of yours. For this step, you need to have all your documents in place. This step consists of detailed documentation. Where you will have to provide id proofs and credit histories. These checks have been made necessary by the Reserve Bank of India to make sure that the applicant is valid. Thus reducing the risk of defaults.

Final loan approval:

Once you have been approved as an applicant the bank will lay its terms and conditions for the loan. Usually, the banks provide 90% of the value of the gold as a loan. This depends on the purity of gold. For instance, if you want a Rs 50000 gold loan you will have to provide gold of around 55K-60K. Once both the parties agree on the loan terms the gold loan gets processed. When the loan gets approved then the borrower’s account will get credited with the funds within a couple of hours. Gold loans are very low hassle loans and also a quick way to get some funds.

Also Read: Different Types of Personal Loans

The application process for a 50k gold loan:

Gold loans usually start at an interest rate of 9% and go up to 29% in India. Banks like HDFC, IndusInd, ICICI, SBI, etc all can provide you with a gold loan. The interest rates vary from bank to bank. It is observed that private sector banks offer a higher interest rate than public sector banks. According to the RBI, guidelines banks can give 90% of the gold value as a loan. This is also known as the loan to value ratio (LTV). To apply for a gold loan abide by the following steps:

  • First, check your eligibility. For example, if you want to take a 50k gold loan you must provide the bank with jewellery of higher worth.
  • Also, to check your eligibility you can use a gold loan eligibility checker online. These checkers are very accurate and will give you the best results. Other than that these calculators are super quick, easy to use and also help with financial planning. 
  • Once you are sure of your eligibility you can go ahead and apply to a bank for a gold loan. 
  • It is always best to compare different banks and their gold loan features. It is wise to pick a bank that will offer you a low-interest rate and a longer tenure for a gold loan. 

Usually, gold loan tenures range from six months to a year. You should keep in mind that the stones on your jewellery will not be taken into account for a loan. Their weight will not be considered. 

Benefits of taking a gold loan

Gold comes with many benefits such as :

  • Quick approval process than any other loans.
  • People with low credit scores can also apply for a gold loan. This is because the bank will hold the possession of their gold as security. 
  • This loan is perfect for short-term fund requirements.

Gold loans are very secure and do not take a lot of time for approval. To apply for a gold loan you can simply contact the bank of your choice and they will guide you through the entire process. It is best to do your quality checks to determine the amount you will get for adequate financial planning.


Sakshi is a Financial Advisor who helps people with investments and help them to get more out of their investment.

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