Gold Loan

Terms and Conditions:

1. Loan Nature & Eligibility:
   • A Gold Loan is a secured loan where gold jewellery or approved gold coins are pledged as collateral.
   • Eligble applicants include individuals with:
     • Ownership of gold ornaments
     • Valid KYC documents
   • Loans are granted based on gold purity, weight, and market value.
2. Acceptable Collateral:
   • Only gold jewellery and approved coins are accepted as collateral.
   • Loans are not permitted against:
     • Gold bars/bullion
     • Digital gold, ETFs, or mutual funds
   • The value is calculated based on pure gold content only (stones/gems excluded)
3. Loan Amount & LTV Ratio:
   • Loan amount is determined by the Loan-to-Value (LTV) ratio:
     • Up to 75% of gold value (standard loans)
     • Up to 85% for small-ticket loans (as per RBI norms)
   • Final sanctioned amount depends on:
     • Gold valuation
     • Borrower profile
4. Interest Rate:
   • Interest rates may be fixed or floating, depending on lender policy.
   • Rates vary based on:
     • Loan tenure
     • LTV ratio
     • Market conditions
   • Interest is charged on the outstanding loan amount.
5. Loan Tenure & Repayment:
   • Loan tenure typically ranges from 3 months to 24 months.
   • Repayment options include:
     • Bullet repayment (principal + interest at end)
     • EMI-based repayment
     • Interest-only payments with principal at maturity
   • Borrowers must repay on time to avoid penalties.
6. Valuation & Transparency:
   • Gold valuation is done using:
     • Standardized purity testing
     • Market-linked pricing (based on recent gold rates)
   • Loan agreements must clearly mention:
     • Valuation method
     • Loan amount
     • Charges and repayment terms
7. Charges & Fees:
   • Applicabe charges may include:
     • Processing fees
     • Valuation charges
     • Late payment penal charges
     • Auction charges (in case of default)
   • All charges must be clearly disclosed upfront.
8. Prepayment & Foreclosure:
   • Borrowers can prepay or foreclose the loan anytime.
   • Prepayment terms depend on:
     • Loan type (fixed/floating)
     • Lender policies
9. Safety & Custody of Gold:
   • Pledged gold is stored securely by the lender.
   • Proper documentation and acknowledgment are provided.
   • The lender is responsible for safe custody and insurance of pledged gold.
10. Loan Closure & Release of Gold:
    • On full repayment:
      • Gold must be returned within 7 working days (or earlier)
    • Delay in release may attract penalties on the lender as per RBI rules.
10. Default & Auction:
    • In case of non-payment:
      • The lender may auction the pledged gold
    • Before auction:
      • Borrower must receive prior notice
    • Any surplus amount after recovery must be returned to the borrower
11. Transparency & Borrower Rights:
    • Borrowers are entitled to:
      • Clear loan agreement
      • Fair valuation process
      • Transparent charges and repayment terms
    • Terms must be explained in a language understod by the borrower.
12. Regulatory Compliance:
    • Gold Loans are governed by:
      • RBI lending guidelines (2025-2026 updates)
    • Rules ensure:
      • Borrower protection
      • Standardized valuation
      • Fair recovery practices