Gold Loan Process: Step-by-Step Guide to Applying

What is the Gold Loan Process?

The gold loan process is the series of steps followed to obtain a loan by pledging eligible gold jewellery or ornaments as security. Unlike unsecured borrowing, a gold loan is backed by the value of the pledged gold. We evaluate the gold and determine the loan amount that can be offered against it.

The process typically starts with an eligibility check and application. The borrower then submits the required KYC documents and gold jewellery for assessment. We verify the documents and evaluate the gold's purity, net weight, and applicable valuation. Based on the assessment and applicable LTV limits, the eligible loan amount is determined. Once the loan is approved and the agreement is completed, the funds are disbursed to the borrower's bank account.

Understanding the gold loan procedure beforehand can help borrowers keep the required documents ready and complete the application with fewer delays.

How Does the Gold Loan Process Work?

The gold loan procedure generally follows these stages:

1. Eligibility check: The borrower checks whether they meet the age, residency, documentation, and gold ownership requirements.

2. Application: The borrower submits a loan application along with the required KYC documents.

3. Gold valuation: The pledged jewellery is assessed for purity and net weight. The applicable gold price and valuation methodology are used to determine its value.

4. Loan assessment: We determine the eligible loan amount based on the value of the gold and applicable LTV requirements.

5. Approval and agreement: After successful verification, the loan is sanctioned and the borrower completes the required documentation.

6. Disbursal: The approved amount is disbursed through the applicable mode.

7. Secure storage: The pledged gold remains in our secure custody until the loan is closed and the gold is eligible for release under the applicable terms.

Step-by-Step Gold Loan Process at L&T Finance

The gold loan process at L&T Finance can be completed through the following steps:

1. Check Your Eligibility

Before applying, check the applicable eligibility requirements. L&T Finance currently lists Indian residency and an age range of 18 to 70 years for its Gold Loan, along with ownership of eligible gold jewellery or ornaments. The gold should generally fall within the applicable purity range specified.

2. Keep Your Documents Ready

Prepare your KYC documents, address proof and other documents that may be required for the loan. Keeping these documents ready can help reduce delays during verification.

3. Submit Your Gold for Valuation

Take the eligible gold jewellery or ornaments to an L&T Finance branch as required. The gold is assessed for purity and net weight. The valuation considers the applicable reference gold price and the purity of the jewellery.

4. Complete Verification

The submitted documents and application details are verified. We also determine the loan amount that can be sanctioned against the assessed value of the gold.

5. Review and Accept the Loan Terms

Once the loan is approved, review the applicable interest rate, tenure, repayment terms, charges and other conditions. The applicable terms will be provided as part of the loan documentation and Key Fact Statement, wherever applicable.

6. Receive the Loan Amount

After successful completion of the required formalities, the sanctioned amount is disbursed to the borrower's bank account. L&T Finance states that gold loan disbursal can take around 15-30 minutes after submission of documents and gold, subject to successful verification and approval.

Eligibility Criteria for the Gold Loan

The applicable eligibility criteria may vary based on the loan scheme. L&T Finance currently lists the following basic requirements for its Gold Loan:

• The applicant should be an Indian resident.
• The applicant should generally be between 18 and 70 years of age.
• The applicant should have eligible gold jewellery or ornaments to pledge.
• The gold should meet the applicable purity requirements.
• Additional requirements may apply based on the selected loan scheme and the applicant's circumstances.

Meeting the basic eligibility requirements does not automatically guarantee loan approval. The final sanction is subject to verification, valuation, applicable policies and terms.

Documents Required for the Gold Loan

L&T Finance requires KYC and other applicable documentation to process a Gold Loan. The documents may include:

• PAN card
• Proof of possession of Aadhaar Number or another accepted identity document
• Address proof, where required
• Valid income proof, if applicable based on the loan requirement
• Recent photographs or other documents, as requested during the application process

L&T Finance lists documents such as a driving licence, passport and voter ID among accepted alternatives for applicable identity or address verification. The exact documentation requirement may vary depending on the application and applicable regulatory requirements.

Charges Applicable During the Gold Loan Process

Before taking a gold loan, it is important to understand the charges that may affect the overall borrowing cost. L&T Finance's published schedule lists charges applicable to Gold Loans, subject to the relevant scheme and terms.

These may include:

The actual charges applicable to a borrower depend on the selected scheme and the applicable terms. Borrowers should review the latest Schedule of Charges and Key Fact Statement before accepting the loan.

You can check your eligibility and begin your Gold Loan application on the L&T Finance Planet App before visiting a branch for gold valuation.