What is the maximum tenure of a Gold Loan?

A Gold Loan is a great way to use your gold jewellery to raise money in times of need. You need to deposit your ornaments with your bank as security, and the bank provides a loan based on the value of the gold. The loan has to be repaid with interest later. But do you know the maximum repayment period you can get for a Gold Loan? Let's find out about maximum tenure for Gold Loans here.

What is the maximum tenure for a Gold Loan?

The maximum tenure of a Gold Loan varies based on the lender. It is usually between 2 and 3 years.
For instance, the maximum tenure for a Gold Loan issued by Axis Bank is 36 months. The loan amount can range between ₹25,001 and ₹40 lakh, depending on the value of the pledged gold.

Long-term Gold Loan with EMI payments

Long-term Gold Loans are repaid via EMIs over your chosen repayment period. The Gold Loan maximum tenure to repay your loans remains 3 years.

Short-term Gold Loan with lump sum payment

If you need money for immediate needs, you can apply for a short-term Gold Loan with lump sum repayment. In this type of loan, you repay the loan with interest in full instead of paying monthly instalments. The tenure for such loans can be 6 months, usually with a fixed interest rate.

Gold Loan tenure

The minimum repayment period for an Axis Bank Gold Loan is 6 months, while the maximum tenure is 36 months. You can choose the tenure as per your convenience.

Apart from the limits set by your lender, your Gold Loan maximum tenure can also depend on the following factors

Loan amount
Bank regulations and policies
Eligibility criteria
Current market conditions
Value of gold

Eligibility criteria for a Gold Loan

The general Gold Loan eligibility requirements are as follows -

Gold weight and purity: The purity of the gold should be at least 18 karat. Your lender may specify a minimum weight of the pledged gold as well.
Age: You must be 18 years old to apply for a Gold Loan. If you are older than 75 years, you may not be eligible for a Gold Loan.
Repayment capacity: You must be capable of repaying your loan amount with interest. Banks check your ability to repay the loan through your Gold Loan documentation, such as income tax returns, salary slips and bank statements.
Credit history: Banks verify your credit history and credit score to check your creditworthiness. However, this requirement is lenient for Gold Loans because it is a secured loan.

Can you extend the Gold Loan tenure?

Yes, you can request that your bank extend the tenure of your Gold Loan. You may need to provide documents like proof of income, income tax returns and bank statements. The bank will decide whether to extend your Gold Loan maximum tenure based on these documents. Be sure to consider interest costs while making this decision.

Also Read: 7 Key differences between Fixed Deposit and Gold

Conclusion

If you are in need of urgent funds and have gold ornaments you don't wear often, use them to finance your monetary needs through a Gold Loan. You can get a loan for up to 75% of the value of the gold. However, remember that the Gold Loan maximum tenure is limited to 36 months. Plan your finances accordingly to pay your Gold Loan quickly and get your pledged gold back.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.