Gold holds a unique position within the cultural and economic landscape of India. For countless years, gold has been more than just a precious metal – it has been a symbol of tradition, prosperity, and emotional connection.
Economically, gold has been a reliable hedge against inflation and currency fluctuations. Holding physical gold has been seen as a way to preserve wealth across generations. Additionally, gold has a universal appeal, making it a globally recognised form of currency.
In India, gold's significance has grown to involve its role in finances, especially through gold loans. Gold loans are a popular choice, allowing you to borrow against your gold jewellery. If you are seeking a financial solution that combines the value of your gold jewellery with quick access to funds, a gold loan is worth considering.
What is a gold loan rate per gram?
When obtaining a gold loan, the per gram rate represents the borrowing amount associated with each gram of pledged gold.
For example, if you own 20 grams of 22 karat gold, and the per gram rate is Rs. 4,500. Consequently, the combined market value of the gold possessions equals Rs. 90,000. As a result, they could potentially secure a loan of up to Rs. 67,500 (75% of the total market value) against the gold pieces they possess.
Factors affecting gold loan rate per gram
The gold loan rate per gram is influenced by various factors. Market conditions, demand and supply dynamics, and even international gold prices play a role in determining this rate. Staying informed about today’s gold loan rate per gram allows you to gauge the lending environment and make informed borrowing decisions. The loan against gold per gram directly affects the loan amount you can obtain. A higher rate means you can secure a larger loan amount for the same quantity of gold.
How to calculate gold loan rate per gram as per gold purity?
The process of gold loan per gram rate calculation is quick and simple. Available gold loan per gram calculators work on the following basis to arrive at computed results.
- The weight of the gold jewellery to be pledged is considered.
- The purity level of gold is determined, with ideal purity sought at 18-22 karat.
- Average price of 18-22 karat gold jewellery is computed for the past 30 days.
- The amount sanctioned is calculated as per the lender’s LTV.
The purity of a gold ornament closely determines and impacts the ultimate gold loan per gram rate computed. Now that you know the process of calculating the per gram rate, know the various benefits of availing a gold loan from Bajaj Finance.
How much can I get for a gold loan per gram?
The loan amount per gram of gold you can secure depends on various factors, including the purity and current market value of gold. Bajaj Finance typically offers loans up to 75% of the gold’s market value. For instance, if the market value of 1 gram of gold is Rs. 5,000, you may receive up to Rs. 3,750 as a loan. This percentage may vary across lenders and according to the weight and karat (purity) of the gold pledged as collateral. The appraisal process evaluates the gold’s purity, and then the loan-to-value (LTV) ratio is applied, providing a clear idea of the amount you can borrow per gram. The higher the purity (22-carat or 24-carat gold), the greater the loan amount you may be eligible for. Lenders often adjust loan offerings based on market conditions and individual policies, so it is advisable to check the rates with multiple lenders. Quick processing time of gold loans make them a popular option for individuals seeking fast access to funds. It’s crucial to use a gold loan calculator to estimate how much you can get based on the weight and purity of your gold, ensuring accurate financial planning.
Factors that determine gold loan rate per gram
Several factors influence the gold loan rate per gram, including the purity of gold, market conditions, and the loan-to-value (LTV) ratio set by the lender. The purity of your gold plays a significant role—24-carat gold will fetch a higher loan amount per gram than 22-carat gold. The current market price of gold is another major factor, as gold rates fluctuate daily, impacting how much you can borrow against your gold. Additionally, the LTV ratio, which typically goes up to 75%, determines the loan value you can receive based on the gold’s worth. Lenders also consider the borrower’s credit history and repayment capacity when determining loan offers. Even though gold loans are secured, a good repayment history may enable more favourable loan terms. The overall demand and supply of gold in the market can influence loan rates as well, as lenders adjust rates to align with prevailing economic conditions. Lastly, the lender’s specific policies, promotions, and seasonal offers may affect the rate per gram, so it is advisable to compare options before applying.
Gold loan rate per gram for 22-carat and 24-carat gold
The gold loan rate per gram differs based on the purity of the gold you pledge. Generally, 24-carat gold, which is purer than 22-carat gold, yields a higher loan amount per gram. For instance, if 24-carat gold is valued at Rs. 5,000 per gram in the market, you could receive up to 75% of that value, which would be Rs. 3,750. On the other hand, 22-carat gold, being slightly less pure, may have a market value of around Rs. 4,600 per gram, resulting in a lower loan amount per gram. Lenders, including Bajaj Finance, offer loans up to 75% of the gold’s value, and the amount varies according to the current market price and gold’s weight. It is important to note that most lenders only accept gold of 22-carat or 24-carat purity for loans, with the value being assessed based on its weight and purity. The difference in value between the two purities is a key determinant in how much loan amount you can expect, making it crucial to assess the purity before applying for a loan.
Gold loan per gram eligibility and calculation
Eligibility for a gold loan per gram is straightforward, with minimal requirements. To qualify, you need to be an adult and own gold jewellery of at least 18-carat purity, although most lenders prefer 22-carat or 24-carat gold. The loan amount is calculated by determining the weight and purity of the gold and then applying a loan-to-value (LTV) ratio, which can go up to 75% of the gold's market value. For instance, if you pledge 100 grams of 22-carat gold with a market value of Rs. 4,600 per gram, the total value would be Rs. 4,60,000. With an LTV of 75%, you could receive a loan of up to Rs. 3,45,000. The loan calculator tools offered by lenders, such as Bajaj Finance, can help you estimate the amount you can borrow based on the gold’s weight and purity. Lenders also consider factors such as the current gold price and may have a minimum weight requirement. The loan tenure, repayment options, and interest rates are then tailored to your specific financial situation.
What affects the gold loan rate per gram?
Several factors influence the gold loan rate per gram, including the current market price of gold, the purity of the pledged gold, and the lender’s loan-to-value (LTV) ratio. Market prices fluctuate daily, so the rate per gram is subject to change accordingly. Purity is another crucial factor, with 24-carat gold fetching a higher loan value per gram than 22-carat gold. The LTV ratio, usually capped at 75% by lenders like Bajaj Finance, determines how much of the gold’s market value you can borrow. Seasonal offers or promotional schemes by lenders may also affect the gold loan rate. Additionally, economic factors such as inflation, demand for gold, and international market trends influence gold prices, which in turn affect the loan rate per gram. Borrower-specific factors like repayment history, income level, and financial stability may also play a role in determining the rate. It is essential to stay updated on these elements to ensure you get the best possible loan value per gram of gold.
How to check the current gold loan rate per gram
To check the current gold loan rate per gram, you can visit the official website of your chosen lender or use their online tools. Bajaj Finance, for instance, provides an online gold loan calculator, allowing you to estimate the loan amount based on the weight, purity of your gold, and the prevailing market rates. Many financial institutions also regularly update their websites with current gold loan rates. You can also visit local gold loan branches to inquire about the rates in person. Since gold prices fluctuate daily due to market conditions, it is advisable to check the rate on the day you plan to apply for the loan. Keep in mind that the rate will also depend on the gold’s purity—24-carat gold typically attracts higher loan rates than 22-carat. Comparing rates across different lenders ensures you secure the best deal, as some may offer promotional rates or seasonal discounts on interest rates.
Benefits of taking a gold loan
- Financing against the underlying asset value: You can easily utilise the underlying asset value of gold ornament to raise necessary funding urgently.
- High loan amount: The purity and weight of gold offered for the pledge can fetch gold loan funding starting from Rs. 5,000 up to Rs. 2 crore easily.
- Minimal paperwork: The documents list for a gold loan is short and involves only the address proof and KYC documents.
- Affordable rates of interest: Secured nature of financing makes the gold loan interest rate more affordable.
- Multiple repayment options: Choose your suitable repayment method to fit your monthly budget.
- Insurance of pledged gold: When availing a gold loan from Bajaj Finance, you also enjoy free insurance coverage for gold for as long as it remains in our custody. Such coverage is provided against theft and misplacement of stored gold.
- Partial release of gold ornaments: If you need some of your pledged gold, you can secure partial release of the pledged item against loan repayment of an equivalent amount.
By staying informed about today's gold loan rate per gram and using simple calculations, you can confidently navigate the borrowing process, leveraging your gold's value for your financial needs.
