How do Fluctuations in Gold Prices Impact Your Gold Loan

How the market gold rate affects your gold loan value

With gold prices on the rise, many people are realising the hidden value of the jewellery sitting at home. Gold has always been trusted as a safe asset, and now it is also a smart way to get quick funds through gold loans.

A gold loan works in a simple way—you pledge your gold jewellery, borrow money against it, and once you repay, you get your gold back. The loan amount you get depends on the purity and weight of your jewellery, but also on the current gold price. When gold prices go up, the eligible loan amount increases. If the price drops, the loan value may be slightly lower. This makes market trends important when planning a gold loan.  

All you need is one KYC document like Aadhaar, voter ID, passport, or driving licence. With Bajaj Finserv Gold Loan, you get quick approvals, transparent valuation, and loan amounts from Rs. 5,000 up to Rs. 2 crore—making it stress-free and reliable.

Reasons why gold rate fluctuates

Gold is seen as a safe and valuable asset across the world. However, gold rate fluctuation is common and can impact your buying and investment decisions. Let us look at the major reasons behind gold price fluctuation and what drives gold fluctuation price in India:

International market trends:

Global gold prices set the tone for local rates. Any major event in international markets can lead to gold rate fluctuation in India.

Currency value changes:

When the Indian rupee weakens against the US dollar, gold price fluctuation becomes more noticeable, as gold is traded globally in dollars.

Demand and supply:

During festive and wedding seasons, the high demand for gold causes a sharp gold fluctuation price across cities.

Inflation rates:

Gold acts as a hedge against inflation. When inflation rises, the demand for gold increases, leading to gold price fluctuation.

Interest rates:

Lower interest rates make gold more attractive as an investment, contributing to gold rate fluctuation.

Government policies and import duties:

Changes in import duties or government policies can cause gold price fluctuation in the domestic market.

Keeping an eye on these factors can help you plan your gold purchases better and take advantage of price movements.

Impact of gold price fluctuations

The demand for gold loans is closely tied to the market price of gold. When you apply for a gold loan, the amount you can borrow depends on factors such as the weight and purity of the gold ornament, as well as the current market rate of gold.
 

The changes in the market price of gold are an important factor in determining the baseline value of the gold loan. The loan to value for gold loan plays a crucial role here, as it represents the percentage of your gold’s value that can be borrowed. Fluctuations in the gold rate directly impact the loan amount you are eligible for. As per RBI regulations, most lenders offer a maximum loan to value for gold loan of up to 75%, ensuring that borrowers get fair access to funds while protecting lenders against market volatility.

For instance, if you pledge gold with a current value of Rs. 1 lakh, the highest loan amount you can receive is Rs. 75,000. However, if we suppose that the price of gold increases by 5%, the value of the gold that was worth Rs. 1 lakh will now be worth Rs. 1.05 lakh. In this scenario, the LTV ratio of 75% would equal Rs. 78,750. In other words, borrowers can obtain a larger loan amount if the value of their gold increases.

Bajaj Finance provides gold loans at the most competitive gold interest rates, with easy eligibility requirements and minimal paperwork. The loan amount can be disbursed within a few just a few hours.

Before you pledge your gold, know your options. Check your gold loan eligibility and choose the right amount and tenure.

How to apply for a Bajaj Finserv Gold Loan

You can follow these simple steps to apply for a Bajaj Finserv Gold Loan:

Step 1: Click on the ‘APPLY’ button to open the online application form.

Step 2: Enter 10-digitl mobile number and request OTP.

Step 3: Submit the OTP.

Step 4: Fill in your personal details and select the branch closest to you.

Step 5: Download the in-principal eligibility letter.

A Bajaj Finance representative will assist you with an appointment at your preferred gold loan branch.

You are invited to visit us with your 18-22 karat gold jewellery at the time convenient to you. Our staff will evaluate the purity of your gold jewellery and process your application.

We will keep your gold jewellery safely in a state-of-the-art vault. Your gold will be kept securely and returned to you when you complete your repayment tenure. We also offer free insurance for the gold while it is in our custody.

It is really that simple. Get a gold loan of up to Rs. 2 crore to meet any of your planned or unplanned financial needs.

With lightning quick processing at more than 1100 branches across the country, we will do our best to get you the funds you need in an easy and hassle-free way.
 

Apply in minutes. Money in account instantly with a Bajaj Finserv Gold Loan*