A gold loan is one of the fastest and simplest ways to access funds during emergencies. It requires minimal paperwork, works for people with irregular income, and offers instant approval because your gold acts as the security.
But before you walk into a bank or NBFC, it’s important to understand whether you are eligible, how lenders evaluate your gold, and what factors affect the loan amount you can get.
This guide breaks down the complete gold loan eligibility criteria in a simple and practical way.
Key Eligibility Requirements at a Glance
| Eligibility Factor | Requirement |
| Age | 18–75 years (co-borrower required above 70 in many cases) |
| Residency | Must be an Indian resident |
| Gold purity | Jewellery: 18–22K, Coins: 24K (up to 50g) |
| Documents | Basic KYC (ID + address proof), PAN & ITR needed only for high-value loans |
| Loan Amount | Based on gold purity, weight & valuation |
| Loan-to-Value Ratio (LTV) | Up to 75% of gold’s market value (as per RBI guidelines) |
| Credit Score | Not mandatory, but can influence interest rate |
| Repayment Capacity | Evaluated for high-value loans or borrowers with high existing debt |
- Age Criteria for Gold Loan Eligibility
Lenders have clear age limits for applicants:
- Minimum age: 18 years
- Maximum age: 70–75 years (varies by institution)
If the borrower is above 70:
- Many lenders require a co-applicant, usually a younger family member.
- This is to ensure repayment capacity due to retirement-age risk.
Tip: If you are applying on behalf of elderly parents, be prepared to co-sign the loan.
- Citizenship Requirement
Only Indian residents are eligible for gold loans.
- NRIs, foreign nationals, and OCI holders are typically not eligible — even if they own gold stored in India.
- This is due to KYC restrictions and valuation risks.
- Gold Purity & Type: The Most Important Factor
Lenders accept only certain types and purities of gold:
Accepted Gold for Loans
| Gold Type | Accepted Purity | Notes |
| Jewellery | 18K to 22K | Stones, pearls, etc. are excluded from weight |
| Gold Coins | 24K | Maximum 50g per customer (RBI rule) |
| Sovereign Gold Coins | Allowed | Subject to weight rules |
| Bars / Bullion | Not accepted by most banks | Only some NBFCs accept them |
Not Accepted
- Gold-plated jewellery
- Artificial or mixed-metal jewellery
- Damaged gold or items with too many stones
- Foreign gold coins in many cases
Tip: Hallmarked gold is always preferred and reduces disputes during valuation.
- Loan Amount Eligibility: How Much Can You Get?
Your loan amount depends on:
- Gold purity (higher purity = higher value)
- Net gold weight after removing stones
- Market gold rate on the day of valuation
- Lender’s internal policies
- Lenders calculate loan amount based only on pure gold content, not design or emotional value.
- Loan-to-Value Ratio (LTV): The 75% Rule
The RBI allows lenders to offer up to:
75% of the gold’s market value
This means if your gold is valued at ₹1,00,000, you can get a maximum loan of ₹75,000.
Some useful points:
- If gold prices rise, your loan eligibility can increase
- If gold prices drop, top-up loans may not be possible
- Special high-LTV schemes are sometimes offered by NBFCs
- Documents Required for Gold Loan
One of the biggest advantages of gold loans is the low documentation requirement.
Basic Documents
- Aadhaar / PAN / Voter ID / Driving License
- Address proof
- 1–2 passport-sized photographs
When Additional Documents Are Needed
For loans above ₹25 lakh, lenders may ask for:
- PAN card (mandatory)
- Income Tax Returns
- Bank statements
- Proof of business income (for self-employed)
For smaller loans, no income proof is needed—ideal for homemakers, students, and senior citizens.
- Credit Score: Not Mandatory but Influential
A gold loan does not require a strong credit score.
Even borrowers with low or no credit history are eligible.
However:
- A higher credit score may help you get lower interest rates
- A poor repayment history may result in:
- A slightly higher interest rate
- Reduced loan amount
- Stricter repayment terms
Tip: If you’re applying for a large loan, checking your CIBIL score first can help you negotiate better.
- Income & Repayment Capacity
Gold loans do not require income proof for most applicants.
But lenders still consider repayment capacity if:
- You request a high loan amount
- You have multiple existing loans
- You are near retirement age
This helps lenders ensure you can repay without risk of auctioning your gold.
- Other Factors That Influence Eligibility
- Condition of gold: Scratched or heavily worn-out jewellery may reduce valuation.
- Ownership requirement: The gold must belong to the borrower or a close family member.
- Existing liabilities: High debt or pending EMIs may reduce the loan amount sanctioned.
Who Is NOT Eligible for a Gold Loan?
- NRIs and foreign citizens
- Individuals below 18 years
- People with gold purity below 18K
- Borrowers with disputed or stolen gold
- Individuals unwilling to complete KYC
Final Thoughts
Gold loans are one of the most accessible forms of credit in India, thanks to flexible eligibility rules and minimal documentation. Understanding factors like gold purity, LTV limits, required documents, and age criteria can help you qualify easily and secure the best interest rate.
With a little preparation and the right lender, getting a gold loan becomes a quick, safe, and hassle-free process.
FAQs on Gold Loan Eligibility
- Is income proof mandatory for a gold loan?
No. Income documents are required only for loans above ₹25 lakh.
- Can students or homemakers apply?
Yes. As long as they own eligible gold and have valid KYC.
- Does gold need to be hallmarked?
Hallmarking is preferred but not mandatory. Non-hallmarked gold may undergo stricter testing.
- Will lenders accept old or broken jewellery?
Yes, as long as purity is intact. Stones or broken parts are excluded from weight.
- Can senior citizens get a gold loan?
Yes. Borrowers above 70 years may need a co-applicant.
