Loan Against Gold Jewelry (Emotions Are Embedded)

What value does gold hold for Indians:

Gold has universal acceptance and is highly valued as an asset class worldwide, but Indians associate with the precious metal emotionally as well. India is not only the largest consumer of the precious metal today. Since time immemorial, gold has always played a crucial role in India's social ethos, with the metal holding a place of sanctity among the predominantly Hindu population.

However, gold jewelry is worn by all Indian and they have high ornamental value during marriages, social functions and festivals.

Further, Indians use gold for other occasions as well. For instance, when a new house is constructed, people embed a few grams of gold at the foundation level as doing so is considered very auspicious.

During death, too, a small quantity of gold is placed in the deceased's mouth before cremation. And in today's world, the need of a steady cash flow becoming a priority for almost everyone, gold has become the perfect answer for those in urgent need of cash.

Loans for gold:

This need, in turn, has made handing out loans against gold jewelry a priority for many financial institutions, with many offering attractive plans, especially in smaller cities, to ensure more gold loans are availed of by the middle class. A loan against gold ornaments is a product to facilitate liquidity against such ornaments without having to sell them.

Gold jewelry can further be put to productive use when taking loans against them. When the required documents are submitted and the gold quality evaluated, a loan will get almost immediately sanctioned. The loan can be disbursed by cash; demand draft or funds transfer to an account.


If a borrower happens to default in repayment, penal interest of around 2% per annum over and above the normal rate of interest is usually levied on him.


Loans against gold jewelry come with very attractive features. The process is not complicated and loans are disbursed quickly, the paperwork is very simplified, the repayment options are very easy and the interest rates are very attractive as they are low.

Such loans do not require collaterals in cash or landed assets. Up to 80% of the value of the gold can be disbursed as loan. Gold loans further have anytime liquidity, while EMI payments do not apply and the only interest applicable is service charges. Moreover, an individual can rest assured that his gold jewelry is in the safe custody of his lender.

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