Golden Tips for Gold Loan

As we celebrate International Women’s Day, it is important to acknowledge the financial challenges that women in India face. One of the biggest hurdles that women face is the lack of access to credit. This is where gold loans can play a critical role in empowering women financially, especially because India is the largest consumer of gold in the world. Gold loans have been around for centuries and have traditionally been used by women as a means of financial security.

In recent times, gold loans have become increasingly relevant, especially for women in India. A gold loan is a type of a secured loan where the borrower pledges their gold ornaments or coins as collateral to the lender. With a compounded annual growth rate of 11% for gold and an annualised CPI (Consumer Price Index) of 6.3%, over the last decade, gold has been an excellent inflation proof investment. In India, gold loans are offered by banks, non-banking financial companies (NBFCs), and other financial institutions. However, before you take a gold loan, there are a few things that one should be aware of.

  • Interest rates: Interest rates on gold loans start as low as 7% p.a. On the occasion of International Women’s Day, many financial institutions provide exclusive offers and discounts on gold loans to women borrowers. Therefore, it is advisable to look out for such offers to get a better deal.
  • Loan to value (LTV) ratio: LTV ratio is the amount of loan a lender can give you against the value of your gold. In India, the maximum LTV ratio for gold loans is 75%. Women should also ensure that they get a fair and transparent evaluation of their gold, so that they may be able to procure the best possible loan amount.
  • Repayment terms: Understanding the repayment schedule and the penalties for defaulting on payments should be a priority. It is also important to choose a repayment tenure that suits one’s financial needs and situation. This can be particularly relevant for women who may have irregular incomes or may need to prioritise other financial obligations.
  • Processing fees: Processing fees are usually a percentage of the loan amount and can vary from lender to lender. Therefore, from a woman’s perspective, it is important to understand the processing fees associated with a gold loan and to choose a lender that offers reasonable and transparent fees.
  • Security of gold: Women may have a sentimental or an emotional attachment to their jewellery. Hence it is extremely important for every borrower to ensure the security of their gold. Women must make sure the lender has adequate security measures in place to protect their gold. It is also important that women validate an appropriate receipt for the gold they pledge as collateral.
  • Quality of the lender: Choose a lender that has a good track record of customer service and is known for transparent and fair lending practices. Women are preferably advised to borrow gold loans with established institutions in the country for the best rates and security.


Taking a gold loan in India can be a great option who are looking to invest their money wisely. However, before taking this step, it’s important to evaluate one’s financial needs, compare different lenders, and understand all the hidden fees and charges associated with the loan. Additionally, it’s crucial to keep your gold safe and repay the loan on time to avoid additional interest and penalties.

As we celebrate International Women’s Day on the 8th of March 2023, it’s important to acknowledge the increasing number of women in India who are progressing toward becoming financially independent and seeking to make informed decisions about their investments. By keeping these key factors in mind, women can make the most of the opportunity to take a gold loan and invest their money in a safe and secure way. It’s important to empower women with knowledge and tools to make financial decisions that are right for them and their families.

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