The 22 carat gold rate today directly impacts the amount you can borrow through a gold loan. Higher gold rates mean you will get a higher loan value for the same jewellery, ornaments and coins weight. On the other hand, if the gold rate drops, the loan amount you are eligible for will reduce. Lenders usually calculate the loan based on the applicable market value and purity of your gold. So, before applying for a gold loan, always check the gold price trend. This will help you plan better and ensure you get maximum value from your jewellery when pledging it for financial needs.
What decides your eligible loan amount?
Your eligible gold loan amount is determined by the value of the gold you pledge. During the assessment, the lender evaluates your gold based on its weight, purity, the applicable gold rate and the eligible Loan-to-Value (LTV) ratio. While the loan amount depends on these factors, the total borrowing cost is influenced by the applicable gold loan interest rate.
Your eligible loan amount depends on:
- 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, coins or ornaments 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 more, 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
- There are no foreclosure charges. You can close the loan early without any penalty
- Choose from multiple repayment options. With bullet repayment, both the principal and interest are paid at maturity. With regular repayment, interest is paid half-yearly, while the principal is paid at maturity.
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 22 carat gold rate, gold purity, and weight.
Need funds against your gold? Apply for a Bajaj Finance Gold Loan through a simple application process.
