Things to know about Gold Loans

January 11, 2018by Team CapitaWorld0

In the last article, we have learned basics of Gold Loans. Today, we will explore some more aspects of gold loans.

Features of Gold Loan

  • Term: Usually, the loan tenure is not more than 2 years.
  • LTV: Nowadays, it is rare for lenders to offer more than 70% of the value of your gold.
  • Source: You can avail Gold Loan from Banks, NBFC or Gold Finance Companies.
  • EMI: The borrower is not supposed to pay the EMI; he is expected to pay only interest part of the loan amount.
  • Custody: Your gold items will be in the custody of respective finance company until the loan is fully repaid.
  • Default: In case of non-payment of dues, the lender can sell the pledged gold as per the terms & conditions of the loan agreement.

Advantages of Gold Loan

  • Fast disbursal of loans
  • Minimum documentation
  • Flexible repayment options
  • No need to show income proof
  • No credit score check required

Do’s & Don’ts of Gold Loan

  • Before opting for a gold loan, always compare different gold loan interest rates, charges and rules as not all the lenders offer the same product features. So, pick a lender who offers you the best rate and features which best fits your requirements.
  • Always check the credibility of the lender. You can check the credibility of lender by reading online feedback of present & old customer. May be you have found a suitable plan for a gold loan but if the credibility of the lender is in doubt, then do not choose that lender or the plan.
  • Try to make payments on time and do not become a defaulter payee. Becoming a defaulter can make you lose possession of your gold assets.
  • You must enquire about pre-payment and late payment charges.
  • For availing a gold loan if someone has given fake or stolen gold, then it’s illegal and is a punishable offense under Indian Penal Code.

Frequently Asked Questions

Q 1. How to Test Your Gold Jewelry?

You can check the purity of gold by using below methods:

  • X-ray test
  • Bite the gold
  • Visual inspection
  • Check BIS Hallmark on gold items
  • Rub Gold on Kausauti (a black stone)

Q 2. How many types of Gold Jewelleries are made in India?

Some examples are:

Kundan Jewelry, Lac Jewelry, Bead Jewelry, Filigree Jewelry, Handmade Jewelry, Ivory Jewelry, Jadau Jewelry, Meenakari Jewelry, Navratna Jewelry, Pachchikam Jewelry, Stone Jewelry etc.

The impurity of gold components varies from one type of jewelry to another. The amount of impurities affects the actual calculation of the amount of loan.

Q 3. What is Hallmark?

The Hallmark gold refers to the certified quality of the gold. If the gold is Hallmarked, quality of the gold is assured. There must be five types of laser engraved marks on gold which are: BIS logo, Retailer’s logo, Year of certification, Assaying center’s logo & Purity (916, 875 etc.).

To Sum Up

We hope that this article will help all potential gold loan customers. If you still have any query left with you, then please feel free to contact us at +91 95120 15768 or send an e-mail at

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