Gold loans have become one of the most convenient and fastest borrowing options in India. Whether someone needs funds for medical emergencies, education, wedding expenses, business growth, or personal use, pledging gold provides immediate liquidity without lengthy paperwork or strict eligibility criteria. But one of the most common questions people ask is: “What is the minimum gold for loan approval, and how much gold is needed to apply?”
The answer depends on various factors, including the lender’s policy, the gold’s purity, the weight of the jewellery, and the loan amount you are looking for. This detailed guide explains the minimum gold requirement, how gold loan value is calculated, and what borrowers should keep in mind before applying.
Understanding the Minimum Gold Requirement
Most banks and NBFCs do not have a fixed “minimum amount of gold” requirement written clearly in their policies. However, they do apply practical limits based on gold valuation.
1. Minimum Weight of Gold
Many lenders accept gold starting from 10 grams to 20 grams as a minimum for processing a loan.
This is because gold below this weight may not provide sufficient value after purity checks and loan-to-value calculations.
2. Minimum Loan Amount
Some lenders specify a minimum loan amount, such as ₹3,000, ₹5,000 or ₹10,000.
To reach this amount, the pledged gold must evaluate high enough.
For example:
If a lender offers ₹5,000 as the minimum loan, and the gold value is too low, the application might not meet the internal cutoff.
Factors That Determine How Much Gold You Need
The minimum gold required is influenced by several factors:
1. Gold Purity (Karats)
The purity of gold is one of the biggest factors in determining loan eligibility.
- 24K gold gives the highest valuation but is usually available as coins/bars, not jewellery.
- 22K gold jewellery is typically accepted by lenders.
- 18K or lower purity gold may be rejected or valued significantly lower.
Higher purity = Higher value = More loan with less gold.
2. Loan to Value (LTV) Ratio
According to RBI regulations, lenders can offer up to 75% of the gold’s market value as a loan.
For example:
If the gold value is ₹50,000 based on purity and weight, a lender may offer a maximum of ₹37,500.
This means:
- If you need a higher loan amount, you need more gold.
- If your requirement is small, even 10–15 grams may be enough.
3. Current Market Price of Gold
Gold loan values are linked to daily gold rates.
When gold prices rise, borrowers can obtain higher loan amounts with the same gold weight.
For example:
- If gold rate = ₹5,500 per gram (22K)
- Value of 10 grams = ₹55,000
- Max loan at 75% LTV = ₹41,250
If the price drops, loan eligibility also reduces.
4. Form of Gold
Lenders usually accept:
- Gold jewellery
- Gold coins (limits apply)
- 24K hallmarked coins from banks (up to 50 grams) depending on lender policy
They do not accept:
- Gold bars
- Unrefined gold
- Antique jewellery where valuation is hard
- Gold with precious stones (stones are excluded from weight)
How Many Grams of Gold Do You Need for a Loan? (Examples)
Below are sample illustrations based on common gold prices and LTV ratios to give an idea of minimum gold requirements.
If You Need a Loan of ₹10,000
Assuming gold rate per gram = ₹5,500 (22K)
LTV = 75%
Required gold value = ₹10,000 ÷ 0.75 = ₹13,333
Gold needed = 13,333 ÷ 5,500 ≈ 2.4 grams
But due to minimum limits, lenders may still require 8–10 grams.
If You Need a Loan of ₹50,000
Required gold value = ₹50,000 ÷ 0.75 = ₹66,666
Gold needed = 66,666 ÷ 5,500 ≈ 12 grams
If You Need a Loan of ₹1 Lakh
Required gold value = ₹1,00,000 ÷ 0.75 = ₹1,33,333
Gold needed = 1,33,333 ÷ 5,500 ≈ 24 grams
If You Need a Loan of ₹5 Lakhs
Required gold value = ₹5,00,000 ÷ 0.75 = ₹6,66,666
Gold needed = 6,66,666 ÷ 5,500 ≈ 121 grams
In general:
| Loan Needed | Approx. Gold Needed |
|---|---|
| ₹10,000 | 8–10 grams |
| ₹25,000 | 10–15 grams |
| ₹50,000 | 12–17 grams |
| ₹1,00,000 | 20–30 grams |
| ₹5,00,000 | 100–130 grams |
These are estimates and vary by purity and market price.
What Is the Minimum Gold Requirement According to Major Lenders?
While policies differ, here are typical ranges:
| Lender Type | Minimum Gold Weight | Minimum Loan Amount |
|---|---|---|
| NBFCs | 10–20 grams | ₹3,000 to ₹10,000 |
| Banks | 15–25 grams | ₹10,000–₹25,000 |
| Local Financiers | 5–10 grams | ₹1,000–₹5,000 |
This means:
Even if just 10 grams of gold jewellery is available, many lenders will approve a loan.
Documents Needed for a Gold Loan
Gold loans require minimal documentation:
- Aadhaar Card / PAN Card
- Address proof
- Passport-sized photograph
Some lenders may not require income proof or credit score checks.
Benefits of Gold Loans
Here’s why gold loans are popular:
- No income proof required
- Fast processing (within minutes or hours)
- Lower interest rates compared to personal loans
- Flexible repayment options
- Credit score not mandatory
Because the gold acts as security, lenders are comfortable offering loans even to borrowers with low credit profiles.
Frequently Asked Questions (FAQs)
Most lenders accept 10–20 grams of gold as the minimum. However, the exact requirement depends on the lender’s policy and minimum loan amount.
Some small lenders and local financiers may offer loans with 5 grams, but banks and major NBFCs usually require at least 10 grams.
Some lenders may accept it, but the valuation is lower. Many prefer 22K jewellery for accurate and higher valuation.
Yes. Stones like diamonds or gems are not considered in the weight. Only the gold part is valued, reducing the loan amount.
Depending on purity and gold rates, 10 grams of 22K gold may fetch anywhere between ₹35,000 to ₹45,000 after applying the LTV ratio.
