What is gold loan repayment?

2 min read
11 March 2025

Gold loan repayment refers to the process of paying back the amount you borrowed against your gold along with the applicable interest, as per the terms set by the lender. Gold loans are a secured borrowing option, meaning they are backed by your pledged gold jewellery or ornaments. This makes the repayment process relatively straightforward, offering various options to suit your financial convenience.

Lenders typically provide flexible repayment plans to accommodate diverse needs. For instance, you can opt for interest-only payments with the principal repaid at the end of the tenure

Once the full repayment is made, the lender releases your pledged gold, returning it to you. It’s important to meet the repayment deadlines, as delays or defaults can lead to penalties or, in extreme cases, the sale of your pledged gold to recover the outstanding amount.

What is the procedure for gold loan repayment?

Gold loans have become a preferred choice for borrowers seeking quick and hassle-free financing. Their popularity stems from their simple eligibility criteria and easy availability. Unlike unsecured loans that require extensive documentation and a high credit score, gold loans allow you to leverage your unused gold assets to secure funds without the stress of meeting stringent requirements.

With a Bajaj Finserv Gold Loan, the process is designed to be straightforward and customer-friendly. You can pledge your gold ornaments or jewellery to access funds for various purposes, such as covering medical emergencies, business expenses, or personal needs. The loan amount is determined by the value of the gold you pledge, ensuring you get maximum benefits for your asset.

Repayment is equally convenient, with flexible options tailored to suit diverse financial needs. Bajaj Finserv offers multiple interest repayment plans, wherein you choose to pay the interest on a monthly, bi-monthly, quarterly, half-yearly, or annual basis. Please note that the principal amount and pending interest, if any, will be due for payment at the time of loan maturity.

This flexibility ensures that you can align your repayment schedule with your financial capacity. Once the loan is fully repaid, your pledged gold is returned, making it a secure and efficient way to access funds while preserving your assets.

Gain a comprehensive perspective on gold loan through a better understanding of how repayment happens and the available options to go for.

Read Also: How can a gold loan help you start a small business

How does gold loan repayment work?

Gold loan repayment is a structured process where borrowers repay the borrowed amount along with the accrued interest to the lender. When you take a gold loan, your pledged gold acts as collateral, allowing you to secure the loan quickly. Gold loan repayment terms vary depending on the lender, but they often offer multiple repayment options to suit individual preferences.

For instance, you can opt for monthly, bi-monthly, quarterly, half-yearly or annual repayment. It is important to note that the principal amount and pending interest, if any, is due for payment at the time of loan maturity.

Once the repayment is completed, the lender releases your pledged gold, ensuring you regain possession of your valuables. The flexibility in repayment options, combined with straightforward terms, makes gold loans a preferred choice for many borrowers.

What are the best ways to repay your gold loan?

Repaying a gold loan efficiently involves selecting the right repayment strategy based on your financial capacity. There are several repayment options that cater to diverse borrower needs, though Bajaj Finance only offers interest repayment options.

Choosing the right method depends on your cash flow and financial goals. Assessing your repayment capacity and planning accordingly can ensure smooth repayment of your gold loan without financial stress.

Know your gold loan repayment period

The repayment period for a gold loan is one of the most crucial aspects to consider. Lenders like Bajaj Finance offer flexible tenures, typically ranging from a few months to a one year, depending on the amount borrowed and your repayment capacity.

A shorter tenure means you pay off your loan quickly, reducing the total interest cost. However, it requires higher monthly payments. On the other hand, a longer tenure spreads the repayment over a more extended period, making instalments smaller but increasing the total interest paid.

Before finalising the tenure, evaluate your financial situation, including your monthly income and expenses. Timely repayment not only ensures the return of your pledged gold but also positively impacts your credit score. Opt for a tenure that balances your monthly obligations and long-term financial goals seamlessly.

How to apply for an quick gold loan

Gold loans are highly favoured for their quick fund disbursement, making them an excellent choice during unexpected financial emergencies. By pledging your 18 gold jewellery as collateral, you can easily get a gold loan starting from Rs. 5,000 up to Rs. 2 crore. With Bajaj Finance you can get an instant gold loan in as little as 15 minutes* with interest rates starting at just 9.50%* per annum.

Meeting the eligibility requirements for a gold loan is straightforward. As an Indian citizen aged between 21 and 70 years, you can apply by providing your KYC documents, which typically include a voter ID card, Aadhaar Card, passport, driver's licence, NREGA job card or a letter from National Population Registration.

To apply, you have the option of visiting a nearby Bajaj Finance branch or applying online through the Bajaj Finance website. Here are the simple steps to follow:

  1. Click on “Apply” to initiate online application.
  2. Enter your 10-digit mobile number and click on “Get OTP.”
  3. Submit the OTP to verify your identity.
  4. Fill in your personal details and select the nearest gold loan branch.
  5. Download In-principle loan eligibility letter.

Once done, you will receive a call from our representative and guide you on the next steps.

Read also: How does the gold rate affect your gold loan

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Frequently asked questions

What is the repayment period of a gold loan?

Our gold loans come with a convenient repayment period of up to 12 months. Once this period is over, you can renew the loan for another tenure of the same maximum duration.

What is the best way to pay a gold loan?

You can complete your gold loan repayment in equated instalments every month, which are designed to spread the entire payment out over a tenure of up to 12 months.

What do we mean by bullet repayment in a gold loan?

Bullet repayment in a gold loan is an option where you pay the interest throughout the loan tenure and the principal amount in a lump sum at the end. This option provides flexibility and is beneficial if you want to minimise regular repayments and settle the entire loan amount at once.

What is the best way to pay a gold loan?

The best way to repay a gold loan depends on your financial situation. If you prefer predictable payments, opting for equated monthly instalments (EMIs) is ideal. For those expecting a lump sum inflow of money later, a bullet repayment plan is suitable. Interest-only payments allow you to pay interest during the tenure and settle the principal at the end. Choose a repayment option that aligns with your cash flow and financial goals.

What is the process of gold loan lending?

Gold loan lending involves pledging your gold ornaments or jewellery as collateral to a lender. The process begins with verifying the purity and value of the gold. Based on this assessment, the lender sanctions a loan amount, usually a percentage of the gold’s market value. After agreeing to the terms and signing the documents, the loan amount is disbursed. Your gold remains securely stored with the lender until the loan is fully repaid.

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