Gold prices can influence the value assigned to eligible gold when applying for a gold loan. However, the loan amount is not based simply on the current gold price. The lender considers the gold purity and applicable LTV limits.
What decides your eligible loan amount?
Your eligible gold loan amount is mainly based on the value and purity of the gold you pledge, along with the applicable LTV limit. The gold loan interest rate affects your repayment cost but does not by itself decide the eligible loan amount. The loan amount can also vary based on the following factors:
- Gold weight
- Gold purity
- Applicable gold rate on the day of assessment
- Loan-to-Value (LTV) ratio
Only the pure gold content is assessed. Stones, enamel, and other decorations on your jewellery are not counted.
The final loan amount depends on the eligible LTV, actual gold purity, and the lower of either the previous day's closing price or the 30-day average closing price published by IBJA or a SEBI-regulated commodity exchange. The LTV ratio must be maintained throughout the loan tenure and may be revised as per RBI guidelines and lender policies.
The loan amount is determined using the applicable LTV ratio, which varies by loan size. To know about LTV in detail, click here.
Gold loan basics: What you should know before applying
With Bajaj Finance, you can borrow from Rs. 5,000 to Rs. 2 crore against your gold jewellery, ornaments, and gold coins. The gold loan interest rate starts from 9.50% per annum.
Jewellery and ornaments are accepted between 18-22 purity. Gold coins are accepted up to 24 karat purity. Your gold is stored in secure vaults with insurance cover for the entire loan duration.
A few things worth knowing before you apply:
- Your loan amount is based on the weight and purity of your gold, not what you originally paid for it
- Bajaj Finance uses the lower of the previous day's closing price or the 30-day average closing price published by IBJA or a SEBI-regulated commodity exchange
- Only one valid KYC document is required: Aadhaar card, Voter ID, passport, driving licence, NREGA job card, or a letter from the NPR
- Choose from multiple repayment options. With bullet repayment, both the principal and interest are paid at maturity. With regular repayment, interest is paid every six months, while the principal is repaid at maturity
- There are no foreclosure charges; you can close the loan early without any penalty
Before applying, use the gold loan calculator to estimate your eligible amount, or check your gold loan eligibility online to understand your borrowing capacity based on gold rate today in Akola, gold purity, and weight.
It takes just 2 steps to check your eligibility for a Bajaj Finance Gold Loan. Enter your mobile number now.
