Gold Loans for Women: A Beginner-friendly Guide to the Process

Indian women own not just 22% of MSME businesses, but also 11% of the world's gold. This means that not only do they have a way to get quick loans, but also an intent to spend on something that gives them financial independence. The key benefit of a Gold Loan for women is that they can spend it flexibly on everything from travel to medical bills.

Interest rate, however, is still an important consideration as it affects both your EMI and total interest. This requires you to apply for a loan with a lender that offers the lowest Gold Loan interest rate in India. This blog discusses how you can get a Gold Loan for women at low interest rates.

What is a Gold Loan for Women?

A Gold Loan for women is a secured loan where they can use their gold jewellery as security to borrow funds. These loans have lenient eligibility requirements, reduced interest rates, and repayment schemes that are specifically designed to suit women. Gold Loans empower women to meet their personal, business, or emergency needs without selling their gold assets.

Also Read: Gold Loan for Wedding Expenses? Benefits, Risks & Smart Tips

How to Get the Best Interest Rate for a Gold Loan?

Here is a step-by-step process for applying for a Gold Loan for women:

Step 1: Research Thoroughly and Compare Lenders

A Gold Loan is a secured loan in which you offer gold jewellery, coins, or bars as collateral. This increases the need to choose a regulated, reliable, and affordable lender that can be trusted with the gold. This is why you should start by comparing lenders to find one that is trusted and offers low interest rates. You must also compare processing fees, valuation charges, and foreclosure penalties.

Step 2: Evaluate Your Eligibility

All lenders follow their own eligibility criteria, which you must meet to apply for a Gold Loan. Ensure that you meet the minimum required age and credit score.

Step 3: Use Online Loan Calculators

Like eligibility criteria, lenders also use different loan-to-value (LTV) ratios to determine the amount you qualify for. Reserve Bank of India (RBI) mandates banks and lenders to offer a maximum LTV ratio of 75%. Use the online Gold Loan EMI calculator to know the amount you can borrow against your loan and the EMI you will pay. If you need a higher loan amount, you must choose a lender that offers a higher LTV.

Step 4: Apply for a Gold Loan for Women

Next, you must visit the official website or branch of the lender and fill out an application form. Here, you must provide basic details like your name, address, mobile number, email address, phone number, and OTP (if required).

Also Read: RBI Gold Loan Rules Changed: RBI 2025 Guidelines on Loan & Tenure

Step 5: Upload Necessary Documents

Unlike other secured loans, such as home loans, a Gold Loan does not require an extensive list of documents. If you are applying online, you must provide the necessary identity, address, and KYC documents to process the application further.

Step 6: Gold Evaluation

The lender will now examine the purity and the weight of your gold to calculate its market value. Purity is rated in Karats, with gold of higher karat (such as 22K or 24K) being priced higher than gold of lower karat (such as 18K). The lenders then use an LTV ratio to determine the maximum loan you can obtain.

Step 7: Select the Loan Amount and Tenure

Gold Loans are short-term, but you must choose tenure and amount wisely. Avoid borrowing more than you need, as it increases the repayment burden and interest. Shorter repayment periods not only help to save on interest costs but also ensure that you get debt-free sooner.

Step 8: Loan Disbursal and Repayment

After you sign the loan agreement, the lender releases the loan through cheque, cash, or bank transfer to your account. You pay the loan according to the agreed EMI plan or repayment plan. When the entire loan amount with interest is paid back, the promised gold is given back to you.

Also Read: Can a Gold Loan Improve Your Credit Score: Benefits & Insights

Why Choose the Lowest Gold Loan Interest Rate?

The key benefit of choosing a low-interest-rate Gold Loan is that it reduces the overall cost of borrowing. It reduces your EMI, which makes repayments more affordable and manageable. Here are all the benefits of choosing the lowest Gold Loan interest rate in India:

• Better affordability: Lower interest rate reduces EMIs, which makes repayment easier and less stressful.
• Short-term borrowing benefit: Gold Loans are normally borrowed over a period of six to twelve months, so a low rate would make such short-term borrowings cost-effective.
• Increased chances of approval: Credit score is not as important as in the case of unsecured loans. Lower rates on collateralised loans make access more open, especially to first-time borrowers.

Suppose you want to apply for a Gold Loan of ₹10 lakh for a year. At an interest rate of 11% p.a., you pay a total interest of ₹60,580. On the other hand, you pay a total interest of ₹66,185 with the interest rate rising by just 1% to 12%.

Also Read: Physical Gold Loan vs Digital Gold Loan: What’s the Difference

To Conclude

You may get carried away by claims of lenders offering the lowest interest rates, but the interest rate alone is not what makes a Gold Loan expensive. There are processing fees, foreclosure charges, prepayment dues, and more, which can increase the cost of borrowing. This is why you must choose a lender that offers favourable terms but is also trustworthy.

Poonawalla Fincorp has been the go-to choice for many individuals for Gold Loans. Not only do we offer low interest rates starting at 11%* p.a., but we also offer a higher loan amount of up to ₹50 lakhs. Apply for a Gold Loan for women now to meet all your financial obligations.

FAQs

What is the current interest rate of a Gold Loan in India?

Every lender offers a different interest rate on a Gold Loan. An average interest rate for a Gold Loan in India, however, stands at 10% -24%.

What is the loan-to-value ratio that lenders offer for a Gold Loan?

Reserve Bank of India (RBI) mandates all lenders to offer a maximum LTV of 75%.

What amount of loan can I get on gold?

You can get a maximum of 75% of the gold's value. Suppose your Gold Loan is worth ₹1 lakh today, you can get a maximum of ₹75,000.

Do Gold Loans have any hidden charges?

Yes, there can be processing fees, valuation fees, and foreclosure penalties. Check the schedule of charges every time you sign the agreement.

Is it possible to bargain for the lowest Gold Loan interest rate?

Yes. Borrowers who have a stable banking relationship and a high credit score are usually able to negotiate a rate cut.