Reserve Price Floor:
Under RBI rules effective April 1, 2026, your gold's auction reserve price must not be less than
90%
of its current assessed value.
After 2 Failed Auctions:
The minimum floor may reduce to
85%
— but never below that under any circumstances.
LTV Limits (Apr 2026):
≤₹2.5L → 85% LTV · ₹2.5–5L → 80% LTV · Above ₹5L → 75% LTV.
Valuation:
Based on actual purity + net weight + RBI benchmark price. Stones and gems are excluded from the calculation entirely.
Surplus Refund:
If auction proceeds exceed your total dues, the balance
must
be returned to you by the lender per RBI directions.
Gold loan process has emerged as a reliable financial solution in India, allowing individuals to unlock the value of their gold jewellery to meet urgent or planned financial needs. With quick access to funds and minimal documentation, gold loans are secured against gold, offering both convenience and low risk. This guide explains the process of gold loan, covering eligibility criteria, step-by-step application, and key features, helping first-time borrowers navigate the journey and make informed decisions about their borrowing options.
What is a Gold Loan?
A gold loan is a type of secured loan where you pledge your gold jewellery to borrow money from the lender. The pledged gold is considered collateral. As part of the gold loan process, the lender evaluates the purity and weight of the gold that you submit, Based on this assessment the loan amount is sanctioned. The gold loan process is typically simple, quick, and requires minimal documentation, making it a convenient financing option for urgent needs
Read More: What is gold loan
Step-by-Step Gold Loan Process with IIFL Finance
Here’s how the gold loan process works in a few easy steps.Step 1: Application
The first step of taking a gold loan is to apply to a bank or a non-bank financial company. There are two ways to apply: in-person (at a lender's branch office) or online. In urban areas, borrowers prefer the latter option.Step 2: Evaluation
The lender’s representative will contact you after submitting your application. A representative may come to your home to examine your gold if you have opt for loan at home service. The purity of gold is the first thing financial institutions check. The appraiser determines the price and quality of the gold.Step 3: Documentation
The lender follows RBI Know Your Customer (KYC) guidelines to complete the KYC process. You need to keep your KYC documents for Gold Loan ready to complete this process.Step 4: Approval and Disbursement
Once the applicant confirms their consent to the gold loan amount and other terms, the lender approves the loan. The processing fee for gold loans ranges from 0.10% to 1%.Key features of a Gold Loan
- Secured Loan: Backed by gold as collateral.
- Quick Disbursal: Often approved within hours.
- Minimal Documentation: Basic KYC required.
- Flexible Repayment Options
- No Income Proof Required: Loan is based on gold value
- Loan-to-Value (LTV): Up to 75% of the gold’s market value.
Gold Loan Process: Documents Required
To obtain a gold loan, the applicant must provide the following documents required for gold loan1. Proof of identity: Aadhaar Card, PAN card, passport, driving license, or voter ID card.
2. Proof of address: A passport, driving license, electricity bill, or gas bill.
It is important to note that no proof of income is mandatory to obtain a gold loan.
FAQs
Ans: Gold loans are processed instantly. After completing the verification process and choosing a scheme that meets the requirements, lenders appraise the gold within minutes and approve your loan.
Ans: IIFL Finance gold loans carry interest rates ranging from 11.88% to 27% per annum.
Ans. The gold loan renewal process at IIFL Finance is simple and customer-friendly. You can begin by contacting your nearest IIFL branch or your assigned relationship manager to express your interest in renewing the gold loan. The lender will assess your repayment history, evaluate your current financial situation, and get your pledged gold re-evaluated to determine its present market value.
If you meet the eligibility criteria, a fresh loan offer will be extended to you—with updated terms such as revised tenure and the applicable gold loan interest rate based on current market conditions. Once approved, the renewed loan amount will be disbursed directly to your bank account, usually within a few hours.
Ans. The processing fee depends on the gold loan scheme that you have opted for and the loan amount being sanctioned. Remember to carefully read the loan sanction letter at the time of disbursement.
India's Most Trusted Gold Loan — Disbursal in 30 Minutes
Pledge your gold jewellery safely at your nearest IIFL branch and unlock up to 85% of its value instantly. No income proof. No credit score required. Stored in insured, secure vaults.
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