What You Should Do Before Taking Gold Loan?

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A gold loan, also known as a loan against gold, is the simplest way to obtain instant cash by pledging your gold as collateral. A gold loan is always the safest option because the borrower gives the lender his or her gold as collateral. Gold loans of up to 75% of the deposited gold’s value are permitted. The percentage is usually different from one lender to the next.

Things to Remember

1. Comparison

The first and most crucial step is to compare per-gram rates from various lenders. Each gram of gold is valued differently by different lenders. You must select the lender who offers you the most money for each gram of gold. Always compare the loan amount or the LTV that borrowers can receive for their gold pledging.

2. The Process of Choosing Lenders

While comparing, it is also critical to conduct a background check on the lender because you will be entrusting your valuable gold to them. Several lenders offer loans against gold at attractive rates but don’t get carried away by the lustre of their attractive offers because they may be deceiving you. As a result, go to a reputable lender; there are numerous nationalised and private players in the market to whom you can entrust your gold.

3. Charges.

Typically, lenders charge up to 1% in processing fees. The Muthoot Gold interest rate differs from other lenders. When comparing various borrowers, keep the interest rate of each lender in mind. The lower the number, the better it is. The interest rate determines the repayment amount. Make a note of how the Muthoot Gold interest rate is calculated as well.

4. Repayment.

Customers have the option of making payments in cash or online. If the customer chooses cash payment, one should be aware that the RBI only allows cash payments up to Rs. 1.99 lakh. If the amount exceeds Rs. 2 lakh, only online payments such as RTGS/NEFT, etc. are required. Repayment can also be made via the company’s website using the digital payment mode. 

The most important document given to a customer is a Gold Pledge card. It is a copy of the agreement between the lender and the customer. The agreement is made up of pledged ornaments and cash received in exchange for the collateral.

The interest rate, terms, and conditions are all stated clearly so that there are no surprises.

There may be lenders who provide a grace period, which simply means that they extend the due date by a few days. Depending on the lender, the grace period may be yes or no. However, if the customer fails to make the required payment, the interest due to the calculation will change.


Gold ornaments weighing 22 to 18 carats are acceptable. The purity of each ornament is evaluated by an authorised appraiser, and a maximum of 75 percent LTV can be given based on the appraisal. Also, keep in mind that gold coins of any carat value cannot be pledged.

The application process can now begin once the checklist has been created. Visit any Muthoot Gold Point branch today to avail of a gold loan.

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