How to Get Gold Loan from Bank: Step-by-Step Guide – 2025

Introduction

Securing a gold loan bank facility is one of the quickest ways to unlock the value of your jewellery without parting with it forever. In Pakistan, banks like National Bank of Pakistan (NBP) and JS Bank offer competitive financing against gold ornaments, with varying markup rates and tenures. This guide walks you through every step—research, preparation, application, and repayment—so you can navigate the process confidently.

Table of Contents

• Introduction
• Why Choose a Gold Loan from Bank?
• Step 1: Research & Compare Banks
• Step 2: Check Eligibility Criteria
• Step 3: Gather Required Documents
• Step 4: Visit the Bank & Valuation
• Step 5: Loan Approval & Disbursement
• Step 6: Repayment Options & Early Settlement
• Comparison of Popular Gold Loan Bank Offers
• Conclusion
• Frequently Asked Questions

Why Choose a Gold Loan from Bank?

A gold loan bank product allows you to pledge your gold ornaments as collateral and borrow up to 70% of their market value. Unlike unsecured credit, gold loans typically have:

• Lower markup rates compared to personal loans.
• Flexible tenures (1–3 years or more).
• Minimal documentation.
• Quick disbursement—often within 24 hours.

Tip: Before applying, check current KIBOR rates, as most banks price loans as “KIBOR + margin.” For example, 1-year KIBOR is around 11.38% p.a. as of May 21, 2025 State Bank of Pakistan.

Step 1: Research & Compare Banks

Start with a shortlist of banks offering gold loan bank products. Key factors to compare:

• Markup Rate (e.g., NBP: 1-Year KIBOR + 4.5% National Bank of Pakistan; JS Bank: 1-Year KIBOR + 9% to 12% JS Bank)
• Loan-to-Value (LTV) Ratio (usually up to 70%)
• Tenure Options (1–3 years for demand finance; up to 5 years for term finance)
• Processing Fees (Rs 1,000–4,500+ depending on bank)
• Special Discounts (e.g., NBP female borrowers get KIBOR + 4.0% National Bank of Pakistan)

Tip: Look for any promotional offers or senior citizen discounts when comparing.

Step 2: Check Eligibility Criteria

While each bank has its own criteria, typical requirements include:

• Age: 18–65 years.
• Residency: Valid Pakistani CNIC/SNIC/NICOP.
• Ownership: You must own the pledged gold.
• Credit History: Clean record—no major defaults.

For term finance (JS Bank), no minimum income is required; NBP may ask for basic income proof if loan amount is high.

Tip: Women borrowers often enjoy slightly lower margins—ask your branch about special female rates.

Step 3: Gather Required Documents

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Generally, you’ll need:

1. Original CNIC/SNIC (and copy).
2. Proof of Income (last 3 salary slips or bank statement).
3. Ownership Declaration (simple undertaking that jewellery belongs to you).
4. Gold Details (photo of ornaments, karat certificate if available).

Tip: Carry utility bills (electricity or gas) for address verification.

Step 4: Visit the Bank & Valuation

1. Walk in to any authorized branch offering gold loan bank services.
2. Submit documents at the Consumer Finance or Gold Loan desk.
3. Gold Valuation: The bank’s expert assesses purity (min. 21 Karat) and weight.
4. LTV Calculation: You’ll be offered up to 70% of the gold’s net value.

Example: If 10 g of 24K gold = Rs 200,000, LTV = 70%, so maximum financing = Rs 140,000.

Tip: Ask the appraiser to show the digital weighing scale reading for transparency.

Step 5: Loan Approval & Disbursement

• Approval Time: Often within 2–4 hours after valuation.
• Processing Fee: Immediately payable (e.g., NBP charges Rs 1,000) National Bank of Pakistan.
• Disbursement: Funds credited to your bank account or given as a cheque/cash.

Personal Experience: When I helped my cousin in Islamabad, NBP disbursed Rs 100,000 within 3 hours—paperwork was minimal, and the relationship officer guided us step by step. It was a hassle-free experience.

Step 6: Repayment Options & Early Settlement

Repayment Modes:

• EMIs: Monthly instalments (Term Finance).
• Bullet Payments: Quarterly markup with principal at maturity (Term Loan B).
• Running Finance: Interest only on utilized amount, principal at maturity.

Early Settlement:

• Banks usually charge 2.4%–3.6% of outstanding principal as early-closure fee (JS Bank) JS Bank.
• NBP allows rollover for up to 3 years on demand finance, by paying up-to-date markup.

Tip: Align your repayment dates with salary credit or business cash flows to avoid late fees.

Comparison of Popular Gold Loan Bank Offers

Feature	NBP Cash n Gold	JS GoldFinance (JS Bank)
Markup Rate	1-Year KIBOR + 4.5% (women: +4.0%) National Bank of Pakistan	1-Year KIBOR + 9–12% JS Bank
LTV Ratio	Up to 70%	Up to 70%
Tenure	1 year or 3 years (demand finance) National Bank of Pakistan	1–4 years (Term); 1–3 years (Running)
Processing Fee	Rs 1,000	Rs 4,500–20,500
Max Loan Amount	Rs 7 million	Rs 25 million
Special Discounts	Female borrowers (–0.5% margin)	None

Conclusion

Getting a gold loan bank facility in Pakistan is straightforward if you follow these steps: research banks, prepare docs, get your gold valued, and choose a repayment plan that aligns with your finances. NBP typically offers the most competitive markup rates, while JS Bank caters to larger loan amounts with flexible tenures. Always compare KIBOR-based margins, processing fees, and special concessions before committing.

Frequently Asked Questions