1. A gold loan is secured by pledged eligible collateral
The lender holds eligible gold or silver collateral and gives a loan against assessed value. You are borrowing against the asset; you are not selling it.
Tip: Pledge is different from sale.
2. Valuation focuses on eligible metal value
Purity, eligible net metal weight and reference-price methodology matter. Making charges, stones and sentimental value do not automatically increase lendable value.
Note: Jewellery purchase price is not the same as loan collateral value.
3. Repayment structures can differ
Products can use EMI, periodic interest with principal later, or permitted bullet-style repayment. Read the KFS for rate, APR, tenure and maturity obligations.
Tip: A small monthly payment can hide a large maturity payment.
4. Fast approval does not remove collateral risk
Gold loans can be convenient and may be cheaper than unsecured credit, but serious default can put pledged jewellery at risk of auction.
Note: Have a repayment exit plan before pledging sentimental gold.
5. Quick check
Why can the loan value be below the jewellery purchase price?
Answer: A - Collateral valuation is based on eligible metal value under the applicable method.