Banks prefer lending money when there's security involved rather than lending without any security. The better the quality of the security, the faster they process the loan. Gold ornaments make a reliable security for loan providers because they can auction the gold if the borrower can't repay the loan, ensuring they get their money back.
Banks typically charge an interest rate between 10 to 17% for gold loans, which depends on factors like the weight and purity of the gold. Additionally, banks usually don't require a guarantor for gold loans. Some lenders even allow borrowers to repay the loan early without any pre-payment penalty, although in some cases, there might be a small fee, usually around 1%.
The minimum requirement for availing of a gold loan is one’s identification proof.
To apply for a gold loan, a borrower can provide any of the following identification documents:
- Aadhar Card
- Driving license
- Passport
- Voter's ID
- Ration card
- NREGA job card
- Letter issued by National Population Register
Documents Required for Gold Loan in Top Banks
HDFC Gold Loan Documents Requirement
- Passport (must be valid)
- Driving license (must be valid)
- Voter’s ID card
- Aadhaar card issued by UIDAI
- PAN card or Form 60
- Passport size photograph
- Agriculture-related documents (only if you're an agricultural customer opting for bullet repayment)
ICICI Bank Gold Loan Documents Requirement
- Two passport-size photographs
- Any of the following identity proof documents with a photo:
- Driving license
- Passport
- Voter’s ID card
- Aadhaar card
- Ration card
- Any of the following address proof documents:
- Driving license
- Passport
- Voter’s ID card
- Aadhaar card
- Ration card
- Job card issued by NREGA
- If the loan value is above Rs. 1 Lakh and directly linked to agricultural activity, proof of land holding is required.
- If the loan value is above Rs. 5 Lakhs and related to allied agricultural activities, supporting documents are required.
Bank of India Gold Loan Documents Requirement
For a Bank of India loan against gold, you can use any of the following identity and address proof documents:
- Rent agreement
- Driving license
- Passport
- Aadhaar card
- Utility bills
- Voter's ID card
Additionally, the bank may request gold jewellery certificate(s) as part of the gold loan application process.
Axis Bank Gold Loan Documents Requirement
- A filled and signed loan application form, along with recent passport-size photographs.
- Documents proving your photo identity, address, and signature.
- PAN card or Form 60.
- Proof of your age.
- Any post-disbursement documents required (if applicable).
Bank of Baroda Gold Loan Documents Requirement
- A completed and signed gold loan application form.
- Recent passport-size photographs of the applicant.
- Identity proof, which can be Aadhaar card, PAN card, passport, voter's ID, or driving license.
- Residence proof, such as ration card, passport, utility bills, or Aadhaar card.
Indian Bank Gold Loan Documents Requirement
To secure the best gold loan rate per gram today, you need to submit the following documents:
- A completed application form.
- Identity proof, which can be any of the following: voter ID, PAN card, Aadhaar card, passport, or driving license.
- Address proof, which can be any of the following: voter ID, Aadhaar card, driving license, or passport.
Canara Bank Gold Loan Document Requirement
- A signed gold loan application form.
- KYC (Know Your Customer) documents, which may include passport, PAN card, Aadhar card, or driving license.
- Income proof, such as your latest salary slips, Form 16, bank statements, etc. (Note: Not all lenders may require income proof for gold loans).
- A certificate provided by the jewel appraiser arranged by the bank, which assesses the value of the gold being pledged as collateral.
SBI Gold Loan Document Requirement
- A completed and signed gold loan application form.
- Two passport-size photographs.
- A valid government-approved identity proof such as a driving license, PAN card, voter’s ID, passport, or Aadhaar card.
- A valid government address proof such as a passport, utility bills, driving license, or Aadhaar card.
- A Witness Letter if the borrower is illiterate.
Documents required for gold loan at the time of disbursement
- Gold ornaments take delivery letter
- DP note & DP note take delivery letter
- Arrangement letter
Federal Bank Gold Loan Document Requirement
- Recent passport size photographs.
- Identity proof, which can be Aadhaar card, driving license, passport, voter’s ID card, or PAN card.
- Address proof, which can be Aadhaar card, telephone bill, ration card, electricity bill, passport, lease agreement, trade license, or sales tax certificate..
Muthoot Gold Loan Documents Required
- Loan application, specifying the purpose of the loan.
- Demand promissory note and take delivery letter.
- Terms & Conditions letter containing declarations, undertakings, and acknowledgments by the borrower.
- Applicant’s consent to authenticate Aadhaar details with UIDAI for eKYC.
- Any one of the following identity proof documents:
- Passport
- Driving license
- Voter ID card
- PAN card
- Aadhar card
- Ration card
- Any other identity card issued by a government authority/ PSU/ nationalized bank, with the applicant’s photograph.
To provide proof of address for a gold loan application, you can submit any one of the following documents:
- Ration card
- Bank passbook
- Aadhar card
- Latest electricity or telephone bills
- Any other identity card issued by a government authority/ PSU/ nationalized bank, with the applicant’s photograph.
Bajaj Finance Gold Loan Documents Requirement
- Any one of the following identity proof documents:
- Passport
- Driving license
- Voter ID card
- Aadhar card
- NREGA job card
- Any one of the following address proof documents:
- Voter ID card
- Driving license
- Aadhaar card
- Passport
- NREGA job card
- Electricity bill
- Letter issued by National Population Register
- If the submitted document doesn’t have your updated address, you can submit any of the following documents required for gold loan as address proof:
- Property/Municipal Tax Receipt
- Utility bill of the current/previous month
- Letter of Allotment of Accommodation from your employer
- Pension/Family pension document
- A relevant income proof document should be provided if asked by the lender to establish your repayment capacity.
Gold Loan Documents FAQs
1. Is income proof required for gold loan?
Yes, most lenders for gold loans do not require you to submit income proof. However, some lenders might ask for income proof documents to assess the borrower's income and repayment capacity.
2. Is a receipt required for gold loan?
When applying for a gold loan, you generally don't need to show the bill or receipt for the gold jewelry you're pledging as collateral. The value of the gold is assessed based on its purity and weight, rather than the purchase receipt.
3. Is PAN card mandatory for gold loan?
As per RBI guidelines, Non-Banking Financial Companies (NBFCs) providing loans against gold collateral are required to obtain a copy of the borrower's PAN Card for all transactions exceeding Rs. 5 Lakhs.
4. What documents are needed for a gold loan?
Different lenders might ask for different documents when you apply for a gold loan. Some may only need your basic identification documents (KYC), while others might also want proof of your income to make sure you can pay back the loan. It all depends on the lender's rules and the type of loan you're applying for.
5. Can we take gold loan in any bank?
Yes, many banks in India now provide gold loans. However, it's wise to check your eligibility before applying for a gold loan with any bank. This ensures you understand the requirements and have a better chance of approval.