The amount you can borrow against your gold depends on several key factors. Here’s what influences the gold loan amount:
Gold Purity & Weight
Lenders offer loans based on the karat value (18K-24K) and net weight of the pledged gold. Higher purity results in a higher loan amount.
Loan-to-Value (LTV) Ratio
According to RBI guidelines, lenders can offer a loan amount of up to 75% of the gold’s current market value. The exact LTV may vary based on lender policies.
Gold’s Market Price
Daily fluctuations in gold rates impact the loan amount. A higher gold price means you can secure a higher loan value.
Lender’s Policies
Different banks and NBFCs have varying eligibility criteria and valuation methods, which may influence the final approved amount.
Repayment Tenure & Type
Some lenders offer higher loan amounts for shorter tenures or specific repayment structures, such as bullet payments.
So, before you apply for a gold loan, conduct thorough research and use tools like the gold loan calculator. This will help you make an informed decision as per your financial situation and requirements.