Overdraft Loan Against Gold Jewellery: A Sure Shot in Financial Emergencies!

We, the people of India, have historically held an emotional relationship to gold. Gold metal often gets handed down through generations and is believed to be not only fortunate but also symbolic of riches. It has long been regarded as a money-making opportunity and a form of protection against potential risks in the future.

Loans based on gold have recently gained popularity because of simpler paperwork, speedy disbursements, and the ability to keep your treasures secure. And almost all of us, simply Indians, are very conservative about our valuable metals. Look at it as putting your precious metal jewellery to good use when it would usually be sitting in lockers. A loan in the form of gold might help you when you’re in dire need of money for a variety of reasons. 

Among the explanations for why gold-backed loans have been the preferred option for most Indians is their lower rates of interest in comparison to traditional loans. Arranging a gold loan through fintech platforms such as Refer Loan is quick, simple, and secure, bringing full peace of mind. 

Before choosing a loan against your gold ornaments, you must first determine your monetary requirements, as well as the gold loan terms and the interest rate that you are satisfied with. Considering all of these aspects, you may select from the numerous gold loan options available in the current market.

Overdraft Against Gold Jewellery Loan Versus Gold Term Loans 

The Overdraft Against Gold Jewellery is represented by the total value of your pledged gold. It works similarly when it comes to credit card usage. You may use whatever sum you desire at any time and from any location, but only up to your credit limit.

In the case of an overdraft against gold jewellery, the financial institution will set up an overdraft account and credit the borrowed amount approved as collateral for the pledged gold. The gold loan sum represents your overdraft. Then you may use any amount you need up to the credit limit that you have. The rate of interest on a loan secured by gold will depend solely on the sum of money borrowed. Additionally, the duration of the repayment. The reimbursement of a loan secured by a gold overdraft is determined by the sum of the money made use of, the span within which it has been utilized, and the corresponding gold OD rates of interest.

A gold-backed term loan is similar to ordinary loans. You are granted a specific sum in exchange for your promised gold for a specific period of time.

EMIs for gold loans are computed depending on the rate of interest and must be reimbursed monthly. Both NBFCs and banking institutions provide this service.

The choice between an overdraft against gold jewellery and a gold term loan is entirely up to your needs.

Highlights of Overdraft Against Gold Jewellery Loans 2024

Feature Details
Collateral Pledge of Gold Jewellery ONLY
Loan Amount – Minimum Loan: Rs. 200,000/-
– Maximum Loan: Rs. 1,00,00,000/- (Rs. 1 crore)
Tenure 12 Months
Age of the Borrower – Minimum Age: 18 years
– Maximum Age: 65 years
Documentation – Latest 4 Photographs of Applicant
– OD Account Need to be Opened under 702 Product Code
– Only KYC Required till Rs. 25,00,000/- loan amount
– For the first customer up to Rs. 35,00,000/-, can be booked on a case-by-case basis with KYC only. No financial documents are required.

Advantages of Choosing Overdraft Against Gold Jewellery

  • Adjustable alternatives for repayment.
  • Interest only becomes applicable depending on the amount of money made use of and the time it is being implemented.
  • Particularly appropriate for managing unexpected immediate monetary requirements.

Anyway, if you’re going to use an overdraft against gold jewellery, you should look into the advantages and disadvantages before making a decision.

Pros Cons
  1. It is convenient to make use of the loan sum according to your needs.
  2. Loan utilization tenure is flexible.
  3. Instead of EMIs, a lump-sum repayment is an option.
  4. Have the ability to be paid and stopped at any moment.
  5. More suitable whenever monthly earnings for repayment aren’t certain.
  6. Freedom concerning applying for the loan money according to your needs
  7. More beneficial interest rates than gold-term loans.
  8. Compared to a typical gold loan, it is feasible to replace or free up gold ornaments throughout the loan period.
  9. You can make purchases online, transfer funds, and pay bills immediately using the borrowed amount.
  10. There are no end-use limitations.
  1. Rising inflation, worldwide gold price fluctuations, and other factors may affect the relevant gold rate.
  2. Reduced autonomy regarding the loan sum taken plus prospective repayments.
  3. Not the best option for long-term financial needs.
  4. That’s not particularly helpful to use as budgeted expenses compared to EMIs.
  5. Probability of reducing the credit limit
  6. In the case of a term loan, the rate of interest is figured daily rather than monthly.

Although you’re dealing with a low credit score, a sufficient sum of money may help bring you out of a tight financial situation. As with personal loans, no financial organization has set out the reason why a gold loan should be applied for. Whenever you need to support a trip for the entire family overseas, a wedding in a foreign country, your child’s extracurricular activities, or some other sudden financial need, a loan in the form of gold is a rapid and reliable answer.

Gold Loan Options Available for You in 2024

Feature Details
Collateral Pledge of Gold Jewellery ONLY
Loan Amount – Minimum Loan: Rs. 25,000/-
– Maximum Loan: Rs. 1,00,00,000/- (Rs. 1 crore)
Tenure – 6/12/24/36 months (EMI Products /Monthly/Upfront Interest Servicing)
Age of the Borrower – Minimum age: 18 years
– Maximum age: 65 years
Documentation – Latest 2 Photographs of Applicant
– KYC documents as per KYC policy
– 1 Cheque for external customers
– Only KYC required upto Rs. 25,00,000/- loan amount for both Internal and External Customers
– For the first customer up to Rs. 35,00,000/-, we can book on a case-by-case basis with KYC only. No financial documents are required.

Depending on your level of flexibility and funding needs, you can choose between a gold loan that offers an EMI choice and a gold loan featuring an overdraft facility. An overdraft option enables you to make payments for interest solely on the loan sum spent. 

Anyway, the interest computation alters for gold loans that include an EMI choice. A gold-backed loan with an EMI plan is ideal for covering budgeted needs. In addition, you can schedule the repayments on your loans in the form of EMIs based on how much you earn. A gold loan featuring an overdraft limit has the greatest potential for minor emergencies and routine business capital needs.

Who Can Reap Benefits from an Overdraft Against Gold Jewellery? 

An overdraft against gold jewellery benefits every person. However, these products have the potential to be very beneficial for medium to small-sized entrepreneurs. A person with recurring credit requirements may benefit from it since it supports using small-ticket loans whenever financing is required and enables interest payments based solely on the loan amount. 

A lower interest rate makes repaying easier. Furthermore, even after you take out the loan, the loan provider may give you a larger amount, depending on the current gold price. This is especially useful when using Overdraft Against Gold Jewellery because withdrawals are possible for larger amounts.

Let Your Gold Jewellery Be a Supportive Pillar in Your Financial Hardships

Previously, Indians were reticent about lending out their jewellery, such as precious metal ornaments, even in grave circumstances. This was mostly due to a lack of networks and an ungoverned marketplace. The rare metal was frequently sold outright or guaranteed to neighborhood lenders at excessive rates of interest. 

The good news is that the scenario has altered throughout the years. 

Today, gold-based loans are among the quickest and most simple ways of getting urgent funding through a quick loan of money against jewellery made of gold. Because of a standardized and inexpensive rate of interest, open practices, and a customer-first mentality, an increasing number of people in need of finances are turning to gold loans to help them through an emergency.

Benefits of Applying for a Gold Loan Through Refer Loan 

  • The loan amount gets paid out quickly.
  • Minimal documentation is required to apply for a gold loan.
  • Prepayment fees may not be applied in some instances.
  • Gold loans are available at cheap rates of interest.
  • You will get some lenders through Refer Loan who offer gold loans with no processing fee. In Some cases, you will get loans with very little processing charges (0.20%-0.50%).

How to Apply For a Gold Loan?

  1. Open
  2. Navigate to the “loan” option.
  3. Select “Gold Loan” Option
  4. Click on


  1. Click on
  2. If you’re an existing client, complete the form. New people must first register before submitting their application form.
  3. Enter all of the information along with your name, mobile number and email Id for OTP authentication.
  4. Bring in all required documents and KYC information.
  5. Choose your loan size.
  6. Attach all relevant papers.
  7. Send your application form.
  8. Wait for a response from a representative from Refer Loan.

Bottom Line

Have you ever thought you could use your gold jewellery as collateral for a loan? It was tough even 10 years ago. But now, technological advancement has made it simpler and more convenient for housewives too. It is easy to apply for a gold loan through ReferLoan. 

Gold ornaments were regarded as an indicator of richness. Whether utilized as an ornament or stored as a valuable item, it was intended to serve as an alternative solution in the event of a sudden scenario. It was arguably never easier to see than it is now, with the introduction of gold loans.

Yes, now you can get loans against gold with speedy approval and a minimal CIBIL score of 550. If you choose Refer Loan as your fintech partner, you will experience straightforward, transparent financing with quick turnaround times. Gold Loan has a variety of plans; select the one that best suits you.

With so many benefits, taking out immediate funding can be advantageous for any person in need of money. Take steps to confirm the gold’s worth before applying for an ideal loan size that can be easily authorized.


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