Gold Loan in Pakistan 2026: Banks, Limits and Costs Compared
A gold loan lets you borrow cash from a bank by pledging your jewellery, which the bank keeps until you repay. In Pakistan, NBP lends Rs50,000 to Rs7 million at 1-year KIBOR + 5%, and BankIslami offers Shariah-compliant financing of up to 70% of your gold’s net value. At today’s 22K rate of Rs381,825 per tola, one tola of 22K jewellery can support a loan of about Rs267,278.
Updated 13 November 2026 · Gold values use the APGJSA Sarafa rate of 12 November 2026 (24K Rs416,536 per tola) · 1-year KIBOR offer 12.92% (5 November 2026)
How a Gold Loan Works in Pakistan
A gold loan is a secured loan: you hand your jewellery to the bank, the bank’s appointed goldsmith (shroff) tests and weighs it, and the bank lends a share of its value. Your gold stays sealed in the bank’s vault and is returned once the loan and markup are cleared. Because the bank holds collateral, approval is fast, credit history matters less, and the rate is usually lower than an unsecured personal loan or credit card.
In banking terms the share of the gold’s value you can borrow is the loan-to-value (LTV) ratio. Banks calculate it on net gold only — the pure gold left after removing stones, wax, lacquer and alloy — so a heavy kundan set can support a much smaller loan than its total weight suggests.
- Collateral: gold jewellery, and with some lenders bars or biscuits.
- Markup: usually linked to KIBOR, the benchmark interbank rate, plus a fixed spread.
- Repayment: monthly instalments, or markup during the term and principal at maturity (bullet repayment).
- Default: if you don’t repay, the bank can auction the pledged gold to recover its dues after giving notice.
Gold Loan Banks in Pakistan (2026)
Four lenders stand out in 2026, each aimed at a different borrower. The figures below are as published by the lenders; terms change, so confirm the current schedule of charges at the branch before you pledge.
NBP Cash n Gold / Sunehri Loan
Conventional · public sector bank- Loan from Rs50,000 to Rs7,000,000
- Markup: 1-year KIBOR + 5% (KIBOR + 4.5% for women)
- Tenure of 1 or 3 years, renewable
- Markup paid quarterly or yearly; principal at maturity
- Processing fee: 0.2% of the loan, with a Rs2,000 minimum
- Gold is valued on a 24K basis, net weight only
BankIslami Gold-Based Financing
Islamic · Tawarruq structure- Financing from Rs250,000 to Rs5,000,000
- Up to 70% of net gold value; minimum 21K purity
- Tenure of 1 to 4 years with monthly instalments
- Profit: 1-year KIBOR + spread
- Net disposable income of at least Rs50,000
- Gold Takaful mandatory; late-payment charges go to charity
U Microfinance Bank Gold Loan
Microfinance · small-ticket loans- Loan up to Rs1,000,000
- Tenure up to 2 years
- No guarantor required
- Accepts ornaments, bars and biscuits
- CNIC, photograph and utility bill
- Credit life insurance included
Khushhali Bank Sona Loan
Microfinance · business borrowers- Loan from Rs350,001 to Rs3,000,000
- Tenure of 6 to 60 months
- Ages 20 to 65
- Two years of business and residence history
- Lump-sum or instalment repayment
- Aimed at small business owners
NBP is the largest player: its gold loan book passed Rs100 billion with more than 173,000 borrowers by mid-2025, which is why most branches have an in-house shroff. The State Bank of Pakistan also allows microfinance banks to lend against gold, which is why U Bank and Khushhali can serve smaller amounts and borrowers without a salary slip.
Gold Loan Comparison Table
| Lender | Loan range | Tenure | Pricing | Best for |
|---|---|---|---|---|
| NBP | Rs50k – Rs7m | 1 or 3 years | 1-yr KIBOR + 5% | Large loans, lowest published spread |
| BankIslami | Rs250k – Rs5m | 1 – 4 years | 1-yr KIBOR + spread | Shariah-compliant, monthly instalments |
| U Microfinance Bank | Up to Rs1m | Up to 2 years | Bank’s schedule | Small loans, no guarantor |
| Khushhali Sona | Rs350k – Rs3m | 6 – 60 months | Bank’s schedule | Business owners, longer tenure |
How Much Can You Borrow Against Your Gold Today?
The loan you get depends on three things: the net weight of gold, its purity, and the lender’s LTV. The table uses the 12 November 2026 Sarafa rate (24K Rs416,536, 22K Rs381,825, 21K Rs364,469 per tola) and assumes the full weight is net gold. Use 70% as the upper limit and 60% as a cautious figure, since many shroffs value slightly below the Sarafa rate.
| Net gold | 22K value | Loan at 60% (22K) | Loan at 70% (22K) | Loan at 70% (21K) |
|---|---|---|---|---|
| 1 tola | Rs381,825 | Rs229,095 | Rs267,278 | Rs255,128 |
| 2 tola | Rs763,650 | Rs458,190 | Rs534,555 | Rs510,257 |
| 3 tola | Rs1,145,475 | Rs687,285 | Rs801,832 | Rs765,385 |
| 5 tola | Rs1,909,125 | Rs1,145,475 | Rs1,336,388 | Rs1,275,642 |
| 10 tola | Rs3,818,250 | Rs2,290,950 | Rs2,672,775 | Rs2,551,283 |
For example, a 5 tola 22K bridal set with 0.5 tola of stones has 4.5 tola of net gold. At 70% LTV that supports about Rs1,202,749, not the Rs1,336,388 the full weight suggests. To see what your jewellery is worth by weight, use our gold price calculator.
What a Gold Loan Really Costs
Gold loans are priced as a benchmark plus a spread. With the 1-year KIBOR offer at 12.92% on 5 November 2026 and the State Bank policy rate at 12%, NBP’s KIBOR + 5% works out to roughly 17.92% a year. KIBOR is reset periodically, so the rate on a renewed loan can rise or fall.
Example: Rs300,000 for 1 year at NBP pricing
If the same Rs300,000 were repaid in 12 equal monthly instalments at that rate, each instalment would be about Rs27,493, and total markup falls to about Rs29,911 because the balance shrinks each month. Monthly repayment is cheaper overall; a bullet loan keeps monthly outgoings low but costs more.
- Processing fee — a one-time percentage or flat charge.
- Shroff or valuation charges — paid to the bank’s goldsmith for testing.
- FED — federal excise duty on the bank’s fees.
- Takaful or insurance — mandatory at some banks; NBP includes it.
- Late payment charges — at Islamic banks these go to charity rather than the bank.
Eligibility and Documents
Gold loans are among the easiest bank loans to qualify for, because the gold carries most of the risk. Typical requirements:
| Requirement | What lenders usually ask |
|---|---|
| Age | 18–60 for salaried and 18–65 for self-employed at NBP; 20–65 at Khushhali |
| Identity | Valid CNIC and recent photographs |
| Address | Utility bill or proof of residence |
| Income | Salary slip or business proof; BankIslami asks for Rs50,000 net disposable income |
| Collateral | Gold you own; BankIslami requires at least 21K |
| Account | A current or savings account with the lender, in most cases |
- Visit a branch that offers gold loans and ask for the current schedule of charges.
- Hand over your jewellery for testing; the shroff checks purity and net weight in front of you.
- Receive the valuation and the maximum loan offer, then choose the amount and tenure.
- Sign the agreement and pledge documents; your gold is sealed in a packet with your signature.
- The loan is credited to your account, usually the same day or within a few days.
- Repay as agreed and collect your sealed gold after full settlement.
How Banks Value Your Gold
The bank values your gold at its own rate, which tracks the Sarafa rate but is often a little lower to leave a safety margin. Several deductions explain why the valuation can be well below what you paid at the jeweller:
- Making charges are ignored. You may have paid 10–25% extra for workmanship, but the bank counts only metal. See gold making charges in Pakistan.
- Stones and wax are removed from the weight. Kundan, polki and zircon work can cut net weight noticeably.
- Purity is tested, not assumed. A piece sold as 22K that tests at 21K is valued at 21K. Learn how to check gold purity before you go.
- 24K-basis valuation. NBP converts the pure-gold content to a 24K value, which gives the same result as pricing 22K jewellery at the 22K rate.
Islamic vs Conventional Gold Loans
A conventional gold loan charges interest (markup) on the amount borrowed. BankIslami’s product, launched in 2026 as the country’s first Shariah-compliant gold financing, uses Tawarruq: the bank sells you Shariah-compliant mutual fund units on deferred payment, you sell them for cash, and you repay the deferred price in instalments while your gold is held as security.
| Feature | Conventional (e.g. NBP) | Islamic (BankIslami) |
|---|---|---|
| Contract | Loan with markup | Tawarruq (deferred sale) |
| Pricing | 1-yr KIBOR + 5% | 1-yr KIBOR + spread |
| Late payment | Charged by the bank | Donated to charity |
| Insurance | Free insurance included | Gold Takaful mandatory |
| Repayment | Markup periodically, principal at maturity | Monthly instalments |
Gold Loan vs Selling Gold vs Girvi
Before pledging, compare the three ways families usually raise cash from gold:
You keep ownership and get the gold back. Rates are regulated and the gold is insured in the vault. Best when you expect to repay within a few years and want to keep the jewellery.
No repayment, but the jewellery is gone and buy-back is usually below the Sarafa rate. Best when the need is permanent. Check today’s gold price first.
Quick and paperless, but unregulated, often costly and risky if the lender disappears or the gold is swapped. Avoid where a bank option exists.
Risks to Check Before You Pledge
- Auction on default: missed payments can lead to the gold being sold after notice. Read the auction clause.
- Rate resets: KIBOR-linked loans become more expensive if the policy rate rises at renewal.
- Renewal limits: NBP allows renewal only up to a set period; plan how you will repay the principal.
- Sentimental pieces: pledge plain pieces before heirlooms or bridal sets you cannot replace.
- Seal and receipt: check that the pledge receipt lists the weight, purity and number of pieces.
Tips to Borrow Smartly
- Borrow only what you need — a lower LTV gives a bigger cushion if gold falls.
- Choose monthly instalments if your income allows; total markup is lower.
- Pledge plain 22K jewellery; stone-heavy sets lose weight in valuation.
- Ask for the full schedule of charges, including shroff fees and FED, before signing.
- Keep your jeweller’s purchase receipts; they help if the purity is disputed.
- Track the 22K gold rate during the loan so a price drop doesn’t surprise you.
Gold Loan in Pakistan: Frequently Asked Questions
Which bank gives a gold loan in Pakistan?
NBP (Cash n Gold and Sunehri Loan), BankIslami (Gold-Based Financing), U Microfinance Bank and Khushhali Bank (Sona Loan) all lend against gold in 2026.
How much loan can I get on 1 tola of gold?
At the 12 November 2026 rate, 1 tola of 22K net gold is worth Rs381,825, so a 70% LTV gives about Rs267,278; at 60% it is about Rs229,095.
What is the gold loan interest rate in Pakistan?
NBP charges 1-year KIBOR + 5%, about 17.9% a year with KIBOR at 12.92% in early November 2026; women borrowers pay KIBOR + 4.5%.
Is there an Islamic gold loan in Pakistan?
Yes. BankIslami’s Gold-Based Financing uses a Tawarruq structure with monthly instalments and is marketed as Pakistan’s first Shariah-compliant gold financing.
What happens if I can’t repay a gold loan?
The bank sends notices and, if the dues stay unpaid, can auction the pledged gold, returning any surplus after recovering principal, markup and charges.
Do banks accept gold with stones?
Yes, but only the net gold weight counts. Stones, wax and lacquer are deducted, so the loan is based on less than the total weight.
Can I get a gold loan without a salary?
Yes. Microfinance banks such as U Bank lend against gold without a guarantor, using CNIC and address proof; self-employed borrowers can also apply at NBP.
This guide explains how gold loans work and is not financial advice. Loan terms, rates and charges are set by each lender and can change; confirm them at the branch before pledging.