• July 21, 2023

Understanding the Basics of Gold Loan Eligibility Requirements

Gold Loan

Gold holds immense financial value in India and a sentimental connection, as it is purchased on numerous auspicious occasions. India is the second largest consumer of gold, with over 25,000 tonnes held by Indians. The rising prices of gold have made it an attractive asset for collateral against loans, with many firms offering lucrative gold loan schemes. However, it is crucial to understand whether gold can be used as collateral and the eligibility criteria for obtaining gold loans. Continue reading to learn more

What do you understand by Gold Loan Eligibility?

Gold loan eligibility refers to the set of criteria that a person must meet to qualify for a loan against their gold assets. Essentially, it refers to the factors lenders consider when assessing whether an individual is suitable for a gold loan.

Typically, gold loan eligibility criteria involve factors such as the purity of the gold being offered as collateral, the applicant’s age, and other documents. The lender assesses these factors to determine whether an individual is eligible for a Gold Loan.

If you’re considering a gold loan, Muthoot Finance can be your one-stop solution. Here are some key points to remember when it comes to understanding the requirements for a Muthoot Finance gold loan eligibility.

Suggested Read: How Can a Loan Against Gold Help You?


Age can be a crucial factor in determining gold loan eligibility. Typically, most lenders have a minimum age requirement of 21 years for borrowers. Moreover, some lenders may also have a maximum age limit for borrowers, which could range from 60 years to 75 years. Anyone above the age of 21 is eligible for a gold loan at Muthoot Finance. Therefore, the borrower’s age can significantly affect the gold loan eligibility criteria requirements.

Gold Ownership

To be eligible for a gold loan, the borrower must own the gold being offered as collateral. At Muthoot Finance the applicant should fill out the form to pledge the gold kept for collateral is under his/her ownership. Additionally, the gold must be in the borrower’s possession and free from legal disputes or encumbrances.

Gold Quality & Quantity

The purity of the gold being offered as collateral is an essential factor in determining the loan amount, and for Muthoot Finance the quality of the gold should be 22 karat or higher as suitable for a gold loan. The weight of the gold also determines the loan amount, with higher weights usually leading to higher loan amounts. Additionally, the market value of the gold at the time of the loan application is another critical factor that lenders consider.

Loan to Value

The loan-to-value (LTV) ratio is a critical factor that lenders consider when determining gold loan eligibility requirements. LTV ratio refers to the loan amount that a lender offers as a percentage of the gold’s market value. Most lenders offer loans up to 60-90% of the gold’s market value. Therefore, borrowers must ensure that the gold being offered as collateral meets the lender’s LTV ratio requirements. If the gold’s market value is less than the loan amount, the borrower may not be eligible, or the lender may offer a lower loan amount.

KYC Documents

The documents required for a gold loan are a loan application, demand promissory note, terms and conditions letter, proof of identity, and proof of address. And the applicant should be of Indian Nationality.KYC documents establish the identity and address of the borrower and help the lender assess the risk associated with lending money. With proper KYC documents, a borrower is eligible for a gold loan, failed to submit proper documents for verification there is a chance his/her gold loan application may get rejected. Therefore, borrowers must ensure they have all the necessary KYC documents, such as an Aadhaar card, PAN card, and Local Address proof, to increase their chances of being eligible for a gold loan.

Loan at Home service by Muthoot Finance can assist such borrowers by offering doorstep gold loans with minimal documentation requirements and flexible repayment options. As a leading provider of gold loans at home, Muthoot Finance has the expertise and experience to help borrowers obtain the funds they need quickly and easily. Contact us for more details.

Suggested Read: Gold Loan Documentation Process in Muthoot Finance

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