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Is taking a gold loan Safe?

Is taking a gold loan Safe?


Most of India’s working population works in the unorganised sector. They comprise drivers, carpenters, and plumbers, and belong to other such occupations. There is an irregular and variable income structure in most of these sectors.

Most of their income comes in cash and is not credited to bank accounts. There is little or no income proof. When it comes to personal loans or most other loans, there are a lot of stringent documentation processes that one must follow, and this is where a loan against gold comes into the picture.

The Importance of a Gold Loan

One can mortgage the gold ornaments that one owns with a minimum documentation process. The loan amount given to the applicant is never equal to the market value of the gold jewellery. We have regulatory bodies that say that the maximum loan amount should be 75% of the market value of the gold that is to be mortgaged. This scenario creates a buffer against the fluctuation of the gold price and ensures that the borrower will repay the loan.

How it works.

A loan against gold is a secured loan in which borrowers obtain funds by pledging their gold as collateral with Muthoot FinCorp. The market value of gold is calculated on the day of the gold loan application based on the per gram market rate. Only gold ornaments or jewellery, such as gold coins, bangles, bracelets, necklaces, earrings, pendants, and other metals, gems, and stones, are used to calculate the value.

Try getting an estimate from your regular goldsmith and then try a trusted partner like Muthoot Fincorp. You will note a world of difference.


Walk into a Muthoot branch near you, submit your gold along with your KYC documents, and get your loan in one visit. For years, we have been providing instant gold loans to our valued customers, making us one of the most preferred gold loan companies in India.

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