A loan against gold, often known as a gold loan, is a type of secured loan where individuals pledge their gold jewelry, coins, or ornaments as collateral to obtain funds from a financial institution. The lender evaluates the purity and value of the gold before determining the loan amount. Gold loans are considered secured because the pledged gold serves as security, reducing the risk for the lender.

Interest rates on gold loans are generally lower than unsecured loans, and the approval process is often quicker. Borrowers can use the funds for various purposes such as meeting personal or business needs. If the borrower fails to repay the loan, the lender has the right to auction the gold to recover the outstanding amount. Gold loans provide a quick and convenient way for individuals to access liquidity while keeping their gold assets as security.