How to apply for a gold loan — complete 2026 guide

The Indian gold loan market is now estimated at over ₹6 lakh crore (RBI Financial Stability Report, December 2025) — and roughly 65% of that is held by NBFCs, where the speed advantage is real. But the speed comes with a catch: NBFCs generally charge 3-5 percentage points more than PSU banks, and their default-recovery clauses are stricter. Knowing both options before you walk in saves serious money.

A gold loan is a credit facility where you pledge your gold jewellery (or specified coins) with a bank or NBFC as collateral. Title remains yours — you redeem the same physical pieces back when you repay. You are not selling.

The core legal anchors are:

• RBI Master Direction — Reserve Bank of India (Loans against Pledge of Gold Ornaments and Jewellery for Non-Agricultural End-Uses) Directions, 2024 — caps Loan-to-Value (LTV) at 75%, defines eligible collateral (jewellery + specified coins ≤ 50g per borrower), mandates documented purity testing, and regulates auction procedure on default.
• Banking Regulation Act, 1949 — governs banks lending against pledged gold.
• RBI Master Direction — Non-Banking Financial Company (Reserve Bank) Directions, 2016 (as amended 2024) — applies to NBFC gold lenders like Muthoot and Manappuram.
• Indian Contract Act, 1872 §172-181 — defines pledge rights and obligations of pledgor (you) and pledgee (lender).
• Income Tax Act, 1961 — interest on a gold loan is not deductible under §80C if the loan is for personal purposes; if used for business, it can be a deductible expense under §37.

LTV of 75% means: if the appraiser values your gold at ₹4 lakh, the maximum loan you can get is ₹3 lakh. Any lender offering more is violating RBI norms — walk out.

Compared with personal loans, the eligibility bar is light, because the collateral does the work.

• Age: 18 to 65 years (some banks extend to 70, some NBFCs accept up to 75).
• Citizenship: Indian resident with a valid PAN and Aadhaar (NRIs may pledge through a resident family member with proper documentation; a few banks accept NRI applicants with NRO accounts).
• Ownership: the gold must belong to you — or to a co-applicant (spouse, parent) who joins the loan documentation. Family-owned jewellery is fine; gold suspected to be stolen, smuggled, or under a court attachment is not.
• Purity: 18 to 22 carat ornaments. 24-carat coins are accepted only if minted by a bank under the RBI Sovereign Gold Coin Scheme or BIS-hallmarked, and only up to 50 grams per borrower (RBI cap).
• Income proof: generally not required. The collateral is the underwriting.
• Credit score: typically not checked at NBFCs; most banks do a soft pull, but a low CIBIL is rarely a deal-breaker because the gold de-risks the loan.

• State Bank of India — SBI Gold Loan / Realty Gold Loan / Personal Gold Loan: rate 8.75-9.75% pa; processing fee 0.5% (min ₹500, max ₹10,000). Apply on https://sbi.co.in or any branch.
• Bank of Baroda — BoB Gold Loan: 9.15-9.65% pa; near-zero processing fee for existing customers; particularly competitive in southern + western India.
• Canara Bank — Swarna Loan: 9.25% pa starting; agricultural variant Krishi Swarna with lower rates and a different LTV regime under priority-sector norms.
• Punjab National Bank, Indian Bank, Union Bank — all run similar gold-loan products at PSU rates.

PSU banks are slower (2-3 working days for large amounts) but cheapest, and crucially are public authorities under §2(h) RTI Act — escalation by RTI is straightforward.

• HDFC Bank Gold Loan — 8.5-15% pa range; faster than PSU; only at gold-loan branches (not every HDFC branch). Apply on https://www.hdfcbank.com.
• ICICI Gold Loan — 9.25-19.76% pa; doorstep service in metros.
• Axis Bank, IndusInd Bank, Kotak Mahindra, Federal Bank — all offer the product; rates similar to ICICI/HDFC.

Private banks are not directly under the RTI Act (more on that in the escalation section), but they are bound by RBI's Banking Ombudsman scheme.

• Muthoot Finance — India's largest gold-loan NBFC, ~6,000 branches. Rates 12-22% pa (lower for shorter tenure / higher LTV slabs). Apply at https://www.muthootfinance.com or any branch.
• Manappuram Finance — ~4,000 branches, similar pricing, faster doorstep service in many circles.
• Bajaj Finserv Gold Loan — newer entrant, branches in tier-1 and tier-2 cities, rates around 9.5-26% depending on slab.
• IIFL Finance, Shriram Finance — also operate gold-loan books.

NBFC speed advantage is real (often 30-60 minutes branch-to-disbursal). They are regulated by RBI but not under the RTI Act — escalation is via the NBFC Ombudsman (NB-IO) scheme.

A simple rule of thumb:

• Need ₹50,000 in two hours? Walk into the nearest Muthoot or Manappuram. Pay 2-4 percentage points more for the speed.
• Need ₹2 lakh+ and can wait 2-3 days? Go PSU bank. The rate difference will save you several thousand rupees on the same tenure.
• Already have a salary account or relationship with HDFC/ICICI? Their pre-approved gold-loan offer can be in your net banking dashboard already; check before you compare.

• The gold itself — clean it lightly with a soft cloth before going. Do not polish or repair just before — the appraiser may suspect tampering.
• PAN card — mandatory for any loan above ₹50,000 (RBI KYC norms).
• Aadhaar — for KYC + eKYC OTP.
• One photograph (lender will sometimes click in branch).
• Address proof — Aadhaar usually serves; otherwise voter ID, electricity bill, passport, rent agreement.
• Bank passbook / cancelled cheque — for disbursal of any amount above ₹20,000.
• PAN of co-applicant if the jewellery belongs to a spouse / parent who must sign.

The appraiser must value the gold in your presence. Standard methods:

• Touchstone + acid test — traditional, used at most NBFCs.
• Electronic karatometer / XRF (X-ray fluorescence) — non-destructive, used at larger branches.
• Specific-gravity test — for unusual pieces.

The appraiser deducts stones, beads, and any non-gold solder weight, then computes:

• Net gold weight in grams.
• Purity in carat → converted to fineness (22 carat = 91.6% gold).
• Reference rate — the daily price that the lender uses (RBI mandates use of the previous 30-day average closing price of 22-carat gold for the eligible LTV computation, not the day's spot price — this protects both sides from volatility).

Insist on a written valuation slip with: gross weight, net weight, purity, reference rate, gross value, sanctioned LTV%, and loan amount. Keep a copy.

Most lenders offer four repayment structures:

• Bullet repayment — pay nothing through the tenure; principal + entire interest at maturity. Common for 3-12 month tenures. Cheapest in cash-flow terms, riskiest if you can't pay at maturity.
• Interest-only EMI — pay only the interest each month; principal at maturity.
• Regular EMI — principal + interest every month, like a personal loan.
• Overdraft-style gold loan — sanctioned limit, draw and repay anytime, interest only on used amount. Available at SBI, HDFC, BoB.

Tenure: 3 months to 36 months is the typical band. Most NBFC loans default to 6 or 12 months and renew on payment of accrued interest.

Two key documents:

• Gold Loan Agreement — recites loan amount, rate, tenure, default clauses, auction procedure.
• Pledge Form — itemised list of every piece pledged (one ear-stud, one chain, one bangle, etc.) with photographs. Verify each line.

Read the auction clause carefully. RBI Master Direction requires:

• At least 30 days' written notice of intent to auction after default.
• Public auction with reserve price.
• Surplus from auction proceeds (after recovering loan + interest + auction costs) must be returned to you — in writing. Many borrowers don't realise this.

• Up to ₹20,000 in cash (RBI cap on cash disbursal — applies to all gold loans).
• Balance via NEFT/IMPS to your bank account.
• NBFCs: usually same day, often within an hour.
• PSU banks: usually 1-3 working days for amounts above ₹2 lakh.

The lender will seal your jewellery into a tamper-evident packet, signed across the seal, with a unique pledge number. Keep that packet receipt + valuation slip + loan agreement together — bring all three at redemption.

• Pay interest monthly (or at maturity for bullet) — set a calendar reminder.
• Renewal: at maturity, you can pay accrued interest + minor renewal charge and roll over for another tenure. Most NBFCs auto-offer this.
• Redemption: pay full outstanding → lender opens the sealed packet in your presence → verify each piece against the pledge form before signing the discharge.
• Do NOT default beyond the cure period. After 30-day notice, the lender can auction. You lose the jewellery.

+----------------------------------+-----------------------------------------+
| LTV cap (RBI Master Direction    | 75% of 30-day average market value of   |
| 2024, non-agricultural)          | 22-carat gold. e.g., ₹4L gold → ₹3L max |
+----------------------------------+-----------------------------------------+
| LTV cap (agricultural / priority | Up to 90% under priority-sector norms   |
| sector loans)                    | for specified bullet schemes (banks)    |
+----------------------------------+-----------------------------------------+
| Eligible collateral              | 18-22 carat jewellery; specified coins  |
|                                  | (BIS or bank-minted) up to 50g per      |
|                                  | borrower. NO bars, biscuits, or imported|
|                                  | non-hallmarked coins.                   |
+----------------------------------+-----------------------------------------+
| Cash disbursal cap               | ₹20,000 (RBI). Balance to bank acct.    |
+----------------------------------+-----------------------------------------+
| Interest rate — PSU banks        | 7.50% – 11.00% pa                       |
+----------------------------------+-----------------------------------------+
| Interest rate — Private banks    | 8.50% – 19.76% pa                       |
+----------------------------------+-----------------------------------------+
| Interest rate — NBFC specialists | 10.00% – 26.00% pa                      |
+----------------------------------+-----------------------------------------+
| Processing fee                   | 0.25% – 1.00% (min ₹250, max ₹10,000)   |
+----------------------------------+-----------------------------------------+
| Valuation / appraiser fee        | ₹100 – ₹500 (sometimes built into       |
|                                  | processing fee)                         |
+----------------------------------+-----------------------------------------+
| Tenure                           | 3 – 36 months (renewable)               |
+----------------------------------+-----------------------------------------+
| Pre-payment penalty              | NIL for floating-rate loans (RBI rule). |
|                                  | Sometimes 1% on fixed-rate NBFC loans.  |
+----------------------------------+-----------------------------------------+
| Default → auction notice         | Min 30 days written notice (RBI MD)     |
+----------------------------------+-----------------------------------------+
| Surplus from auction             | Refundable to borrower — mandatory      |
+----------------------------------+-----------------------------------------+
| RTI for PSU bank PIO             | ₹10 by IPO; BPL = free                  |
+----------------------------------+-----------------------------------------+

• Purity below 18 carat. Hallmark-stamped 14-carat ornaments are common in some regions — most lenders will refuse, or sanction a much lower amount.
• Non-jewellery items. Foreign-mint coins, gold biscuits, dental gold, gold-plated ornaments — generally rejected. Specified BIS / bank-minted coins up to 50g per borrower are the only exception.
• ID and address mismatch. Aadhaar address differs from PAN database — fix on UIDAI portal first, then re-apply.
• Already pledged elsewhere. Lenders increasingly check the CERSAI gold-loan registry — pledging the same piece at two lenders without redeeming the first is fraud and will be rejected.
• Sanction lower than expected because the appraiser used the 30-day average reference price rather than the day's spot. This is RBI-mandated, not a lender game — verify on the valuation slip.
• Disbursal stuck because the cash cap (₹20,000) wasn't explained. Without a valid bank account, the rest cannot be paid out — open a basic savings account first.
• Insurance not opted. Most lenders require/sell pledged-gold insurance (small premium added to processing fee). Skipping it can delay sanction.
• Family ownership not documented. Jewellery belonging to spouse / mother but you applying alone — co-applicant signature is required.
• Auction proceeds dispute. Lender auctioned after default but did not release surplus — this is the single biggest dispute category. RBI Master Direction makes surplus refund mandatory.

• Walk into the branch. Ask for the branch manager by name and submit a written complaint with date, time, names of staff you spoke to, and the specific issue (under-valuation, denied disbursal, surplus not refunded, packet seal broken at redemption).
• Get an acknowledgement number — every bank and NBFC must give one within 24 hours under RBI's Internal Ombudsman rules.

• Each bank/NBFC publishes a Principal Nodal Officer (PNO) with name, email, phone. Find it on their grievance redressal page.
• 30-day response SLA under RBI's Customer Service framework.
• Useful trail to attach when you escalate to the Ombudsman.

• RBI Integrated Ombudsman Scheme 2021 — covers all scheduled commercial banks and NBFCs above the threshold.
• File at https://cms.rbi.org.in (online complaint management system).
• Helpline: 14448 (RBI Complaints).
• No fee. Award binding on the bank/NBFC up to ₹30 lakh; the bank/NBFC can appeal.
• Key conditions: you must have first complained to the bank in writing and either got an unsatisfactory reply or no reply within 30 days.

• https://pgportal.gov.in → “Reserve Bank of India” or “Department of Financial Services”.
• Higher visibility; routed to a senior officer.
• No statutory force, but useful for parallel pressure.

This is where the public-vs-private distinction matters, and most citizens get it wrong.

RTI helps here when:

• Your gold loan is at a PSU bank (SBI, BoB, Canara, PNB, Indian Bank, etc.) — these are public authorities under §2(h) RTI Act 2005.
• Specifically you can ask the PIO of the relevant zonal/circle office for: the gold valuation method used in your case (which test, by which appraiser, on which date), the LTV computation worked out for your file, the name and designation of the dealing officer, the audit trail of any auction notice and auction proceedings, the surplus computation after auction, and the file movement history if your sanction is delayed.
• RTI to the Reserve Bank of India PIO at the local regional office — for systemic questions like “average TAT for gold-loan grievances at PSU banks in this circle in FY 2024-25” or for guidance on whether a particular practice violates the Master Direction.
• RTI to CGTMSE / NABARD for agricultural gold loans availed under priority-sector schemes.

RTI does NOT help here when:

• Your loan is at a private bank (HDFC, ICICI, Axis, Kotak, IndusInd, Federal, Yes, RBL, etc.) or a private NBFC (Muthoot, Manappuram, Bajaj Finserv, IIFL, Shriram). These are not “public authorities” under §2(h) RTI Act and the Supreme Court has consistently held so. PIOs cannot compel them to share information.
• For private banks/NBFCs, the right route is RBIOS / NB-IO complaint at https://cms.rbi.org.in — that order is binding on them.
• For interpretation of clauses (“is this rate fair?”) — RTI is for facts and records, not opinions. Use the Ombudsman.
• For pre-emptive disputes (“the loan is not yet sanctioned, I want to know why”) — most PIOs will treat this as fishing. File a written grievance with the bank first.

For full procedure see RTI in 12 simple steps.

Q. Can I get a gold loan on jewellery that has stones (diamond, kundan, polki)?
Yes — but the appraiser will deduct the stone weight. Only the net gold weight counts towards the loan. Bring any original purchase invoice if you have it; it speeds up the deduction calculation.

Q. What happens if gold prices fall sharply during my loan tenure?
The lender may issue a margin call (top-up) if your effective LTV exceeds 90% (some lenders trigger at 85%). You'd need to either pay down some principal, pledge additional gold, or accept an early auction. RBI requires written notice + reasonable cure period.

Q. Is the interest on a gold loan tax-deductible?
For personal use — no, it's not deductible under §80C. For business use — yes, treat it as a finance cost under §37 of the Income Tax Act and claim it in your P&L. Keep the loan agreement + interest certificate from the lender.

Q. The NBFC is offering 90% LTV — should I take it?
No. Any non-agricultural gold loan above 75% LTV violates the RBI Master Direction. Walk out. Report it to RBI via https://cms.rbi.org.in or to the NBFC Ombudsman.

Q. Can my gold be auctioned without telling me?
No. RBI Master Direction mandates at least 30 days' written notice of auction at your registered address (and email, if on record). The auction must be public, with a reserve price. If the gold was auctioned without notice, file with RBIOS / NB-IO immediately — these are slam-dunk cases that the Ombudsman routinely orders compensation for.

Q. Do I get back any money if my gold sells for more than my loan amount at auction?
Yes. The surplus (auction price minus your outstanding loan + interest + auction expenses) must be refunded to you. The lender must give you a written statement of accounts. If they refuse, file with the Ombudsman.

Q. My PSU bank is delaying the sanction for 15 days with no reason. Can RTI speed it up?
Not directly — RTI doesn't compel a sanction. But asking “what is the current status of file/loan application no. ___ and what is the next step required from the bank” forces the bank to put the answer on paper, which almost always unblocks the file because the dealing officer's name becomes attributable. Rule of thumb: if branch + nodal officer haven't moved in 30 days, file the RTI.

Q. Is a gold loan cheaper than a personal loan?
Almost always — by 2-6 percentage points at PSU banks, by 0-3 percentage points at NBFCs. See Apply personal loan for a side-by-side. The trade-off: your jewellery is locked up.

Q. Can NRIs take a gold loan?
A few PSU banks and NBFCs accept NRI applicants with NRO accounts and resident family co-applicants. Most prefer the gold to be pledged through a resident family member.

• How to apply for a personal loan — complete 2026 guide
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• All Indian government helplines — one master directory
• RTI forms + state-wise fee chart

Last reviewed: 26 April 2026 by RTI Wiki editorial team. Gold loan limits and LTV caps change with RBI Master Direction amendments — verify current ceilings on rbi.org.in or write to admin@bighelpers.in if you spot a stale figure.