Gold Loan Eligibility — What You Need to Know
Gold loan eligibility primarily depends on the weight, purity, and current market value of the gold you pledge. Unlike personal loans or home loans, gold loans have minimal documentation requirements and no income proof is needed in most cases.
Eligibility Criteria
- Age: 18 to 70 years (varies by lender)
- Gold purity: Minimum 18 karats (75% purity); most lenders prefer 22K or 24K
- Gold type: Gold jewellery, coins (up to 50 grams from banks), and bars
- Documents: Valid ID proof (Aadhaar, PAN, Passport) and address proof
- No income proof required for most gold loan products
Understanding LTV Ratios
LTV (Loan-to-Value) ratio determines how much loan you get against your gold's value. The Reserve Bank of India sets the maximum LTV at 75%. Here's what different LTV levels mean:
- 50% LTV (Conservative): Lower risk for the lender, often comes with lower interest rates
- 65% LTV (Standard): The most common ratio offered by banks like SBI and HDFC
- 75% LTV (Maximum): The highest allowed by RBI, offered by most NBFCs and some banks
What Gold is NOT Accepted?
- Gold below 18 karats purity
- Gold-plated or gold-filled items
- Studded jewellery (only the gold portion is valued, stones are excluded)
- Gold coins weighing more than 50 grams (for bank gold loans)
- Ancestral gold without proper ownership documentation