Last updated 12 Nov 2026
Choose a gold loan lender by what happens to your gold, not by how fast the cash arrives. Your ornaments leave your hands for the whole tenor, so the lender's regulation, valuation method, storage, charges, auction rules and complaint route matter more than a small difference in price. This checklist turns those into questions you can ask at the counter or on a call.
Banks and non-banking finance companies (NBFCs) both lend against gold. The rules that protect you are set by the Reserve Bank of India (RBI) in its Reserve Bank of India's Lending against Gold and Silver Collateral Directions, 2025, which we cite below. Pricing is set by each lender; see current rates on the interest rates page.
The ten-point checklist
What to check and why
| Check | What to ask or look for | Why it matters |
|---|---|---|
| Regulator | Is the lender a bank or an NBFC registered with the RBI? Ask for its registration details and check them on the RBI website. | An unregulated lender is not bound by the gold lending directions or the RBI complaint route. |
| Valuation | Who values the gold, and how? The value should rest on the purity and weight of the gold, tested in your presence. | Under-valuation cuts your loan; a vague method hides it. |
| Written valuation | Do you get a certificate listing weight, purity and net weight after removing stones? | You need it to verify the return of your gold. |
| LTV and amount | What loan-to-value will you be offered, and on what total? | A lower amount for the same gold is a cost. |
| Charges | Processing, valuation, storage and late charges, all set by the lender. | Compare offers on the APR in the Key Fact Statement. |
| Storage and insurance | Where is the gold kept, and is it insured? Ask who bears loss or damage. | Your gold is your security until closure. |
| Auction terms | Notice period, how the auction is announced, reserve price, who can bid. | The directions set minimum safeguards; the lender must follow them. |
| Return of gold | How soon after repayment is the gold handed back? | The directions set a deadline and a daily compensation if the lender is late. |
| Part-payment and foreclosure | Are they allowed, and at what cost? | Early closure should not be a trap. |
| Complaint route | Who is the grievance officer, and how do you escalate? | You should know the next step before you have a problem. |
Valuation: the check that decides how much you get
A lender values gold by its pure-gold content, not by the jeweller's price tag. Stones, enamel and wastage are normally deducted from the weight. Ask for the purity test to be done in front of you and for the result in writing. If two lenders give different valuations for the same item, ask each how they arrived at it. A difference in purity testing is a legitimate answer; a refusal to explain is not.
The directions also limit how much gold can be pledged for a consumption loan. The limit is 1 kg of gold ornaments and 50 grams of gold coins per borrower (paragraph 16); confirm how the lender applies it.
Storage, insurance and return of your gold
Ask in plain words where your gold will be kept and who is responsible if it is lost or damaged. A reputable lender answers without hesitation and puts it in the agreement. On repayment, the Directions say the lender must release the collateral on the same day and no later than seven working days after full repayment or settlement, and let you check it against the certificate. If the lender causes a delay beyond that, it must pay ₹5,000 for each day of delay. Source: Reserve Bank of India's Lending against Gold and Silver Collateral Directions, 2025, paragraphs 35, 36 and 46.
Auction rules you should know before you borrow
Nobody plans to default, but the auction terms are the real test of a lender's fairness. Per the Directions, the lender must give adequate notice, announce the auction in at least two newspapers (one regional, one national), have it run by a trained employee or an empanelled auctioneer, and keep the reserve price at no less than 90% of the current value (85% after two failed auctions). The first auction must be held physically in the district of the lending branch. The lender and its related parties may not bid. Surplus proceeds must be refunded within seven working days. If a lender cannot describe these steps, treat that as a warning.
Red flags
- Pressure to decide on the spot, or an offer that changes between the call and the counter.
- No written valuation, or a certificate that lists a lower weight than your jewellery.
- Gold packed in a way you cannot see or sealed without your signature.
- Charges that appear only on the final repayment day.
- A lender that will not name its grievance officer or show its regulator details.
- Any request to pay a fee to a person or account that is not the lender.
Bank or NBFC: does it matter?
Both can be safe, and both are bound by the RBI directions. Branch network, opening hours, valuation speed and pricing differ from lender to lender, whether it is a bank or an NBFC. Neither is automatically right for you; compare the same loan amount, tenure and structure across two or three lenders, and compare the APR. The same logic applies to business loans from banks and NBFCs.
How LOANZ 360 helps
LOANZ 360 is a loan aggregator, not a lender. You share your details and a clear consent, and we compare them with each partner lender's published criteria before anything goes to a lender. The lender decides, prices and pays out to your own bank account; one advisor follows your file. Start from the gold loan page or the enquiry form.
Frequently asked questions
How do I check if a gold loan lender is regulated?
Ask for its RBI registration or banking licence details, then check them on the RBI website. Banks and NBFCs that lend against gold are regulated by the RBI. Be careful with lenders who cannot or will not show these details.
Is it safer to take a gold loan from a bank or an NBFC?
Both are regulated by the RBI and bound by the same directions on valuation, auction and return of gold. Safety depends on the lender's conduct and your agreement, so compare storage, insurance and auction terms, not just the type of lender.
What should be on the valuation certificate?
At minimum: your name, the item list, gross weight, net weight after removing stones, purity and the valuation. Keep it safe. You will check your returned gold against it when you close the loan.
Can the lender sell my gold without telling me?
No. The RBI directions require adequate notice before an auction and set rules for announcement, reserve price and refund of surplus. If you believe a lender has broken these, complain to its grievance officer first and then to the RBI.
What if the lender delays returning my gold?
Under the directions the lender must return it on the day of full repayment and no later than seven working days after. If the delay is the lender's fault, it must pay compensation of ₹5,000 per day. Write to the lender and keep a record of dates.
Should I pick the lender with the fastest disbursal?
Speed is useful but should not be the deciding factor. A fast lender with unclear charges or storage terms can cost more. Compare valuation method, APR, auction terms and return timelines first.
Related reading: Gold loan guide, Gold loan repayment options, Gold loan LTV, Gold loan foreclosure, Gold loan vs personal loan, Key Fact Statement and APR, Borrower rights and grievance, Gold loans, Lending partners.
See Gold Loan Ask an advisor about it
More guides on this loan
- Gold loan vs personal loan: which one fits your need
- Gold loan repayment options: EMI, interest-only and bullet compared
- Gold loan LTV: how much can you borrow against your gold
- Gold loan guide: how it works, what it costs and the RBI rules
- Gold loan foreclosure: closing early and getting your gold back