What is a loan against jewellery?
A loan against jewellery is a secured financial option where individuals can borrow money by pledging their gold ornaments as collateral. It is an efficient way to access funds without selling your precious assets. Bajaj Finance offers this facility, enabling borrowers to meet their urgent financial needs, whether for personal expenses, medical emergencies, or home repairs.
This loan type is particularly advantageous because it offers quick disbursal, minimal documentation, and flexible repayment options. The loan amount is determined by the purity and weight of the gold jewellery pledged. Typically, lenders provide up to 85% of the gold's market value as the loan amount, adhering to Reserve Bank of India (RBI) regulations.
The maximum LTV eligible for consumption loans per borrower depends on the loan amount and cannot be more than the limits given:
1. For loans up to Rs. 2.5 lakh = LTV 75%
2. For loans between more than Rs. 2.5 lakh to Rs. 5 lakh = LTV 80%
3. For loans from more than Rs. 5 lakh up to Rs. 2 crore = 85%
One of the key benefits is that you retain ownership of your jewellery. Once you repay the loan amount along with the interest, your gold is returned to you in its original form. Bajaj Finance ensures the safety of pledged gold by storing it in secure vaults during the loan tenure.
With low interest rates, a loan against jewellery is an affordable and accessible way to meet financial requirements. Whether you need funds for education, or a wedding, this type of loan provides a practical solution. The process is straightforward, making it ideal for those seeking immediate financial assistance without lengthy procedures or credit score constraints.
By leveraging the value of your gold, a gold loan ensures liquidity while preserving your cherished assets.
How to get a loan against gold jewellery?
Obtaining a loan against gold jewellery is a simple and hassle-free process. Bajaj Finance makes it convenient for borrowers to secure funds quickly. Here’s a step-by-step guide:
- Check eligibility: Ensure you meet the basic eligibility criteria, such as citizenship, age (21 to 80 years) and ownership of gold pledged.
- Gather documents: Collect essential documents like Aadhaar card, Voter ID card, passport, NREGA job card or a letter from NPR).
- Visit the branch or apply online: You can either visit a nearby Bajaj Finance Gold Loan branch or initiate the application process online. Online applications offer added convenience and time savings.
- Gold valuation: The lender assesses the purity and weight of your gold to determine its market value. The loan amount offered typically ranges up to 85% of the gold’s value.
- Loan approval and disbursal: Once the valuation is complete and documents are verified, the loan is approved. Funds are disbursed immediately, often within one branch visit.
- Repayment options: Choose a repayment plan that suits your financial situation. Bajaj Finance provides multiple repayment options, monthly, bi-monthly, quarterly, half-yearly, or annual interest payments, with the principal amount due at the end of the loan term.
The pledged gold remains securely stored in high-security vaults until the loan is repaid. This process ensures transparency, quick access to funds, and the safety of your valuables. A loan against gold is an excellent option for addressing urgent financial needs without liquidating your assets.
Pro tip: Discover your borrowing potential by checking your gold loan eligibility. It takes just a few clicks and no waiting.
How is the value of gold jewellery calculated for a loan?
When you apply for a gold loan, the valuation of your jewellery plays a key role in deciding the loan amount. Bajaj Finance determines this value using a standardised approach by considering the lower of the previous day’s closing price or the 30-day average closing price of gold, as published by IBJA or a SEBI-regulated exchange. This method, along with the assessed purity and weight of your gold, ensures a fair, consistent, and transparent valuation process.
The first step involves assessing the purity of the gold. The jewellery is examined by certified evaluators who use advanced techniques, such as karat meters or acid tests, to verify its purity. Non-gold elements like stones or additional embellishments are excluded from the valuation process.
Once the purity is confirmed, the weight of the gold is measured. The net weight, after deducting any non-gold components, is then considered. The lender applies the prevailing market rate for gold, which is typically based on the daily bullion rate. This ensures the valuation reflects the current market trends.
The loan-to-value (LTV) ratio is then applied to the assessed value. As per RBI guidelines, lenders can offer up to 85% of the gold’s market value as a loan. Bajaj Finance provides competitive LTV ratios, allowing borrowers to maximise their loan amounts.
This process ensures that you receive a fair and accurate loan amount based on your gold’s value. With us, the valuation process is swift and transparent, offering you the confidence and convenience to meet your financial needs without selling your precious assets.
