Gold Loans in Canada: How They Work and What to Watch

Key takeaways

Gold-backed loans in Canada are mainly pawn loans and private jewellery loans, usually for up to 12 months.
The criminal interest rate is 35% APR since January 1, 2025. Pawn loans under $1,000 may go up to 48% APR if the lender’s only remedy is keeping the item.
Monthly rates add up: 3% a month is 36% a year before compounding, 5% a month is 60%.
If you don’t repay, you lose the jewellery. Get the APR, all fees and the sale date in writing.
In India, banks and NBFCs lend up to 75%–85% of the gold’s value under RBI rules; Canada has no equivalent mainstream product.

Can you get a gold loan in Canada?

Yes, but the market is small and different from India. In India, banks and large finance companies advertise “gold loans” at branches. In Canada, the lenders that take gold jewellery as security are mostly:

Pawnshops (pawnbrokers): they lend a share of the item’s value and keep it until you repay.
Private jewellery and gold lenders: often in large cities, sometimes calling themselves “jewellery loan” or “collateral loan” businesses. They work much like a pawnshop.

We did not find a Canadian bank offering a dedicated gold jewellery loan as of October 2026. Banks and credit unions lend against income, credit history, a home or savings instead.

Gold-backed loans don’t check your credit much, which is why newcomers with a thin credit file look at them. But they are usually far more expensive than a bank loan.

How does a pawn or jewellery loan work?

Appraisal. The lender tests the karat and weighs the piece. Bring receipts or hallmark details if you have them.
Offer. They lend part of what they think it is worth. It is often well below the shop price you paid, because making charges and stones are not counted.
Contract. You get a ticket or contract showing the amount, interest, fees and due date. Terms are usually a few months, sometimes up to a year.
Interest and fees. Usually quoted per month, often with setup, storage or appraisal fees on top. Ask for the APR (the yearly rate including fees) in writing.
Repay or lose it. You pay back the loan plus interest and fees to get your item. If you don’t, the lender keeps it and can sell it. One lender said these loans are not reported to credit bureaus, so they don’t build your credit either.

Before you pledge gold, find out what it is worth with the gold value calculator. Then you can judge whether the offer is fair.

What is the maximum legal interest rate in Canada?

Section 347 of the Criminal Code makes it a crime to charge interest above the criminal rate: an annual percentage rate (APR) that “exceeds 35 per cent on the credit advanced.” The Department of Finance confirms it lowered the criminal rate to 35% APR, and the related Criminal Interest Rate Regulations came into force on January 1, 2025. “Interest” here includes most fees and charges, not just the stated rate.

The pawn exception. The Regulations say the 35% cap does not apply to a pawn loan if all of these are true:

the lender carries on a pawnbroking business;
the loan is made against personal property other than a vehicle;
if you don’t pay, the lender’s only remedy is to keep the pawned item; and
the loan is less than $1,000 and the APR is not more than 48%.

So a pawn loan of $1,000 or more falls under the 35% cap. Breaking the law can lead to fines or prison for the lender. Payday loans have their own cap: $14 per $100 borrowed.

Provinces also regulate lenders and consumer contracts. If a contract looks wrong, contact your provincial consumer protection office.

How much does a gold loan really cost?

Lenders like to quote a monthly rate. Multiply by 12 to get a rough yearly rate, and remember compounding makes it worse.

Monthly rate	Yearly, simple	Yearly, if interest compounds monthly
2%	24%	about 26.8%
3%	36%	about 42.6%
4%	48%	about 60.1%
5%	60%	about 79.6%

Our sums. Add setup, storage and appraisal fees on top. For example, borrowing $800 for six months at 3% a month simple interest costs $144 in interest. With a $20 fee, you repay $964.

Compare that with the cap: any loan of $1,000 or more must stay at or below 35% APR including fees. Ask the lender to write down the APR. If they won’t, walk away.

What should you watch for before pledging gold?

Get everything in writing: loan amount, APR, every fee, due date, grace period and what happens on the due date.
Know the value. Check the melt value first, and get a second offer.
Photograph the item and keep a copy of the ticket. Ask how it is stored and insured.
Plan the repayment. Many people lose family jewellery by renewing again and again. Sentimental pieces, like wedding gold, are hard to replace.
Don’t pledge someone else’s gold without their clear consent.
Ask about extensions before the due date, not after.

Selling might cost less than borrowing if you don’t need the piece back. See how to sell gold in Canada.

How do gold loans in India compare?

In India, gold loans are a regulated, mainstream bank and finance company product. Under the Reserve Bank of India’s Lending Against Gold and Silver Collateral Directions, 2025, which lenders had to follow by April 1, 2026:

The maximum loan-to-value (LTV) for consumption loans is 85% up to ₹2.5 lakh, 80% from ₹2.5 lakh to ₹5 lakh, and 75% above ₹5 lakh.
Bullet-repayment loans (pay everything at the end) are limited to 12 months.
Lenders may not lend money to buy gold, including gold ETFs.

Canada has no matching rule set, because gold lending here is a niche pawn business. If you hold gold in India, a loan there may be cheaper, but check whether you can borrow as a non-resident and how you would repay.

What are the alternatives to a gold loan?

Credit union or bank personal loan, if your credit allows. Newcomer programs sometimes help.
Secured credit card to build credit for the future. See how to build credit fast.
Sell a small piece instead of pledging a large one.
Avoid payday loans, which are capped at $14 per $100 but are very costly over a year.

If you want to build up gold rather than borrow against it, RemitBee Gold, from our sponsor, is coming in early 2027 with pure 24K gold from $10. Gold prices can go down as well as up.

Know what your gold is worth before you talk to any lender: use the gold value calculator and today’s gold price per gram in Canada.

Common questions

Do Canadian banks offer gold loans?

We did not find a Canadian bank with a dedicated gold jewellery loan as of October 2026. Loans secured by gold come mostly from pawnshops and private jewellery lenders.

What is the maximum interest rate a pawnshop can charge in Canada?

Since January 1, 2025, the criminal rate is 35% APR. Pawn loans of less than $1,000 can go up to 48% APR if the lender’s only remedy on default is keeping the pawned item. Loans of $1,000 or more fall under the 35% cap.

What happens if I can’t repay a gold pawn loan?

The lender keeps the item and can sell it. Ask about an extension before the due date; some lenders renew if you pay the interest owed.

How much can I borrow against gold in Canada?

It depends on the lender’s appraisal; they usually lend a share of the melt value, not what you paid. In India, by contrast, RBI rules allow up to 85% of the gold’s value for smaller loans.

Sources

Checked against these sources on October 24, 2026. Spotted something out of date? Tell us.

Gold loans in Canada: do they exist and what to watch for