Can You Get a Gold Loan? Here’s What You Should Know

Gold assets offer considerable benefits as part of any robust, diversified financial portfolio. For many, investing in gold coins, bars, and bonds is a great way to expand one’s holdings without increasing financial risks.

Some gold holdings offer investors more income potential than others, however. While assets like gold bonds provide the potential for passive income in the form of interest or gains, most physical assets only have a fixed value held static until they are sold or exchanged.

What if there was a way to capitalize on the value of physical gold assets? A gold loan is a great way for those who hold physical gold assets to put those assets to work.

If you’re new to the concept of gold loans, don’t stress. With experts like our team at Oxford Gold Group, you’ll have all the guidance you need to make informed decisions about your financial future. In this blog, we cover everything you need to know about gold loans, including what they are, how they work, and what you need to do to prepare.

For more professional guidance regarding gold investment opportunities and more, continue browsing our website or give us a call today.

What Is a Gold Loan?

a gold bar on top of a dollar bill

If you’ve never dealt with or heard of a gold loan before, it’s understandable to feel confused about what a gold loan is.

Gold loans are secured loans distributed against the value of physical gold holdings. Secured loans are loans given against held collateral. A gold loan borrower allows a banking or financial institution to hold their physical gold holdings up to a specified limit.

In return, the institution provides the borrower with money, typically in an amount that’s up to 80% of the gold’s actual value. You can speak to lending institutions to ask about their offered rates for gold loans.

How Do Gold Loans Work?

Many financial institutions and banks love to provide gold loans, as this type of loan carries little to no risk for them as a lender.

These institutions offer borrowers cash up to a certain percentage of the gold’s value. During the loan’s repayment, the physical gold holdings such as jewelry, coins, and bars remain with the lending institution as collateral for the loan. If the borrower defaults on their monthly loan installments, the gold remains with the lending institution.


One of the first and most critical parts of the gold loan process is vetting. Banks and financial institutions use this process to learn about borrowers. Depending on the lending institution, borrowers may need to supply information such as:

  •       Identifying documents, including their driver’s license, social security, and more
  •       Credit information
  •       Reason for requesting the gold loan
  •       And more

Quality Checks

After initial meetings, gold loans begin with quality checks. During this stage, the bank or other financial institution tests the purity of the gold jewelry, bars, or other gold presented as potential collateral. This evaluation should be free, so steer clear of lenders who want to charge a fee for checking the quality of your gold.

If you’re considering taking out a loan against a smaller amount of gold, try using a non-banking institution like Oxford Gold Group for a faster application turnaround.

Offer and Approval

Once a bank or financial institution has vetted the borrower and checked the quality of the collateral gold, they may decide to approve the loan request and extend a loan offer.

Once all loan agreement documents are signed, the lender securely stores the collateral gold and transfers the agreed amount to the borrower’s accounts. In most cases, the offer and approval stage can take up to two hours to complete.

Who Can Apply for Gold Loans?

an agent shaking hands with a client after approving a gold loan

Informed investment and borrowing decisions are critical for maintaining the health of any financial portfolio. Even if you qualify for a gold loan, whether or not it’s in your best interest to take on that loan depends on many changing factors.

If you’re considering getting a gold loan, speak to a financial advisor to learn whether or not you’re ready to handle the financial commitments that come with it.

People in Need of Short-Term Funds

Since gold loans are secured loans, obtaining one is usually relatively quick. This speed makes gold loans ideal for people in need of dependable funds for:

  •       Home improvement projects
  •       Car repairs
  •       Special opportunities
  •       And more

People with Low Credit Scores

Many people with lower credit scores have difficulty obtaining lines of credit or personal loans. Since gold loans are secured, many financial institutions are okay with providing these loans to people with low credit scores or no credit.

As with any financial decision, it’s essential to weigh your options carefully before choosing to take out a gold loan. If your credit score is chronically low, speak to a financial advisor to learn your risks before agreeing to a loan.

What’s Involved with a Gold Loan

If you’re ready to apply for a gold loan, you’ll benefit from knowing what to expect from a gold loan and the application process. Below, you’ll find some of the standard features of gold loans to be aware of before signing.


As mentioned above, secured loans involve the lender holding some form of collateral, such as a title deed or other financial holding, against the loan amount. For gold loans, the bank or other financial institution will securely store your gold jewelry, coins, or bars during your loan repayment phase.

Interest Rates and Other Fees

Borrowers repay loans over time, and interest rates allow lenders to profit from the lending process. While this is fair practice, this interest rate will significantly impact the amount of money a borrower is actually paying for the loan.

Interest rates will vary depending on the institution offering the gold loan. Be sure to calculate all interest and final repayment sums before signing any loan agreement.


Like any loan, gold loans are a contract agreement between the lender and the borrower. As such, a gold loan will come with specific repayment terms set forth by the lending institution.

Repayment terms for a gold loan include repayment period length, monthly payment amount, missed payment penalties, and more. Review these terms with your lender and financial advisors before signing a loan commitment agreement.


Some lending institutions may have restrictions limiting what borrowers can use a gold loan to finance. Speak with your lender regarding these and any other potential restrictions for gold secured loans.

Things to Consider Before Getting a Gold Loan

a wooden box with arrows and another one with percentage symbol depicting interest rate

As with any financial decision, choosing to take on a gold loan is a serious commitment. Prepare yourself for taking on a gold loan by considering the elements below.

Different Lenders, Different Rates

One of the most important things a person can do when making decisions about their financial futures is getting multiple opinions and offers.

As a rule, different lenders may be able to offer lower interest rates, better monthly payments, and other features that may make one institution’s gold loan better than another’s. Weigh your options before making any commitments.

Interest and Income

Remember that the amount you will pay for gold or any other type of loan will be greater than the amount you borrowed. Lending institutions charge fees and interest on top of the principal amount of the loan.

Buyers may also encounter additional fees in the form of late payment fees, returned check fees, and more. Be sure to know all your repayment details and weigh the sums against your financial capabilities before committing.

What Types of Gold Can Be Used

Some lending institutions deal with smaller amounts of gold or more common gold items, such as jewelry. Larger financial lenders, such as banks, may offer gold loans that use gold coins and bars as collateral. Speak to each lending institution to know what gold assets you can use as collateral for your gold loan.

Alternatives to Gold Loans

Gold loans are not for everyone. Depending on a person’s available gold assets, financial situation, and financial needs, other lending options may be more sensible.

Personal loans and credit lines can be more costly and difficult to obtain than gold loans. If you’re dealing with low credit scores or limited gold assets, speak to your financial advisor to learn which gold loan alternatives might be available for you.

Get Started with a Gold Loan Today

client shaking hands with a financial agent with his wife beside him after an approved gold loan

Do you have physical gold holdings that you’d like to turn into a short-term fund injection for a project or investment? A secured gold loan is an excellent way to get a dependable loan with great interest rates and reasonable repayment terms. Gold loans often have a faster approval process than other types of loans.

At Oxford Gold Group, we specialize in helping our clients make the most of their physical and digital gold asset holdings. Reach out to us today to see what a gold loan, gold bond, or gold sale can do to improve your financial portfolio.

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