Gold Loan FAQs

Gold Loan FAQs

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Gold Loan Faqs

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What is a Gold Loan?

A loan taken against your gold jewellery is known as a Gold Loan. When you hand over your gold to the bank in return of a specific amount is classified as a Gold Loan. It is a quick and straightforward process to obtain funds against your gold with minimal documentation at competitive Gold Loan interest rates with flexible tenures.

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What are the ornaments or coins that I can pledge for gold loan?

Only acceptable gold ornaments from 18 to 22 karat and only bank minted coins (24 Karat) up to 50 gms per customer can be funded. Non funded items / articles such as Hair pins, Cufflinks, Gold watch, Gold strap, Gold idols, Gold utensils, jewellery with more than 50% deduction, Thread mangalsutra, White gold, Diamond jewellery, Imitation jewellery, Ginni, Gold bars cannot be accepted.

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Do I need to provide any income documents for gold loan?

ITR need to be submitted if availing gold loan of Rs.25 lakhs and above. PAN is a must, if the annual income exceeds Rs.5 lakhs as per Regulatory guidelines.

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Do I need to be an existing customer of the bank to take gold loan?

The customer need not be an existing customer of the bank. However, we recommend that while availing the Gold Loan, customer should open a savings bank/current account facility with the bank which will enable the customer to not only enjoy banking services of the bank, but also assist them in servicing the loan conveniently.

However, we recommend that while availing the Gold Loan, customer should open a savings bank/current account facility with the bank which will enable the customer to not only enjoy banking services of the bank, but also assist them in servicing the loan conveniently.

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What are the different gold loan tenures available?

Bullet Scheme Tenure of 12 Months (Can be renewed for further period of 24 Months with the same loan documents with request letter for renewal from the customer etc.). Interest Payment can be Quarterly /Half Yearly and Yearly.

Vanilla Scheme Tenure of 36 months. No renewal required during the tenure with Monthly Interest. EMI Scheme Tenure of 12,24,36,48 Months. For OD facility, please contact Branch for more details.

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How much gold loan amount can I avail?

Minimum Loan amount: Rs. 20,000/- Maximum Loan Amount: Rs. 1,50,00,000/- can be availed by a single customer/Family/Group at any point of time at the discretion of the Bank.

Loan amount depends on valuation of Gold ornaments assessed by Assayer /Valuer after applying the applicable LTV as per RBI norms. Loan eligibility for the customer is 67 to 75% of valuation amount depending on repayment mode or scheme opted by the customer, for e.g. If customer opts for Monthly Interest in EMI/Vanilla scheme, 75 % of value of Gold is considered; whereas it varies from 67% to 72 % where customer opts for Quarterly / Half yearly interest Payment mode/ scheme.

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Do I need a guarantor to avail the gold loan?

While availing Kotak Gold Loan No Guarantor is required.

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What are the different modes of disbursement for gold loan?

Disbursement can happen by way of fund transfer (preferably to customer’s new or existing Kotak Mahindra Bank Ltd. Account), NEFT & RTGS (to customer’s other bank account).

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Can I avail overdraft facility for my business needs on gold loan?

Yes. Customer can avail overdraft facility which will be valid for a period of 12 months. Customer can revolve & utilize funds as per his/her requirement to the extent of limit sanctioned based on the value of gold ornaments / coins being pledged with the Bank. Please contact Branch for more details.

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Can I foreclose the gold loan earlier?

Yes. You can choose to foreclose the loan anytime which may be subject to foreclosure charges as applicable, if closed before the agreed minimum period (ranging from 45 days to 6 months) and at the discretion of the Bank. Please refer to General Schedule of Features and Charges for Gold Loans for details.

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Which all documents do I need to provide to avail the gold loan?

Customer needs to provide KYC documents which include identity, address & signature proof along-with 2 passport size photographs. Existing customers of the bank need to provide only latest address & signature proof. PAN is a must, if the annual income exceeds Rs.5 lakhs as per Regulatory guidelines.

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Can I avail EMI facility on gold loan?

Yes You can avail the EM Facility on Gold Loan with Maximum tenure of 48 months. Loan to be repaid in equated monthly instalments with principle and interest. EMI can be pre closed only after 6 months otherwise it attracts Pre closure charges.Top Up can be given on EMI loan

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What is the rate of interest applicable on gold loan?

Interest rates are fixed and offered as on date of Loan disbursement. Interest rate starts from 10% p.a., subject to change as per RBI norms and at the discretion of the bank.

This rate is fixed by the bank, depending on the type of loan and tenure, among other factors. It is always better to know interest rate that you are paying on your loan, because it helps you plan your finances better.

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How long does it take to process Gold Loan?

Gold loan can be sanctioned in 90 to 120 minutes approximately in general from end to end, subject to submission of required KYC documents and 2 colour photos by customer. There could be delay if customer doesn’t submit documents required to avail loan or opening of Savings Bank account may take some time if customer is New to the bank. Please note if loan amount is Rs.25 lakhs or above, ITR is required to be submitted by customer and PAN is must if annual income exceeds Rs.5 lakhs.

Valuation of gold will be done by empanelled assayer, who would arrive at branch on call within 15 min once pricing is arrived for the deal. Customer has to be present till the gold packet is sealed in the presence of Assayer and branch officials .

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What is the repayment tenure of a gold loan?

Bullet Scheme Tenure of 12 Months (Can be renewed for further period of 24 Months with the same loan documents with request letter for renewal from the customer.), Interest Payment can be Quarterly /Half Yearly and Yearly. Vanilla Scheme Tenure is for 36 months. No Renewal required during the tenure with Monthly Interest scheme. EMI Scheme Tenure is available for 12,24,36,48 Months.

Vanilla Scheme Tenure 36 months No Renewal Required during the tenure with Monthly Interest. EMI Scheme Tenure ,12,24,36,48 Months. OD facility is temporary withdrawn please contact Branch for further details

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What are the additional fees that I will need to pay at the time of taking a loan?

Fees and Charges varies from scheme to scheme and loan amount.

Basic charges which will be mandatorily applicable and payable for gold loan is Stamp duty, Processing fees and Valuer charges, i.e. charges payable for assessment of gold. Stamp duty charges will be applicable as per respective state’s stamp act. Processing fees ranges from 0 to 2% + applicable GST depending upon the loan amount, Valuer or Assessment charges for valuation of gold, ranges from Rs.350 to Maximum Rs. 1000, depending upon the loan amount (if loan amount is Rs.4 lakhs and above, dual assessment of gold is required to be done and in such cases customer require to bear charges for 2nd valuation)

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What is the penalty for delay in repayment of gold loan?

If any amount is defaulted penalty of 3% on overdue amount will imposed.

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Is the gold pledged with banks safe?

Bank take lot of precaution similar to that of cash and other securities, while storing gold and keep it in sealed packets which are kept in joint custodians of the bank, until the loan is repaid in full by the customer. Gold Packets will be handled safely and swiftly every time by Bank Officials.

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Are there any foreclosure charges on a gold loan?

Yes. Foreclosure charges may be levied if loan is closed before the agreed minimum period (ranging from 45 days to 6 months) and at the discretion of the Bank. Please refer to General Schedule of Features and Charges for Gold Loans for details.

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What are the benefits of taking a gold loan with Kotak?

Kotak Bank ensures 100% transparent and hassle-free process for gold loan, right from valuation till disbursement is carried out in front of the customer.

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What is the assurance that the gold returned is the same?

While processing the loan, a customer is provided with Sanction letter and Appraisal certificate which captures gold ornaments details such as number of ornaments, gross & net weight along with the photograph of the gold ornaments pledged with the bank.

When customer visits the branch for closure of gold loan, he has to carry these documents and cross verify the ornaments details based on the details mentioned in the Appraisal certificate. Gold is kept in sealed packets which are held in joint custodians of the bank in a safe manner similar to that of cash and other securities. Gold packets will be handled safely and swiftly every time and by authorised officials only.

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