If you are considering a gold loan, you might be wondering how the loan amount is decided. As this is a secured loan, the amount you are offered depends on the value of your asset. Here is what you need to know about this process.
When you take a gold loan for the first time
After you submit your application form, you will receive an appointment at your nearest gold loan branch. There, your gold jewellery is weighed, and the value is set based on that day’s market rates for gold.
However, the loan offer you receive will not be the full value of your jewellery. As per RBI regulations, the maximum gold loan amount you receive can go up to 75% of the total value of your gold.
When you renew your gold loan
Our gold loan comes with a repayment tenure of up to 12 months. While we do not offer loan extensions, you have the option of renewing it by availing a fresh loan for another full term once you have paid off your existing gold loan.
In such a situation, the gold jewellery that you had submitted as collateral is weighed again. It is re-valued as per the market rate for gold on the date of renewal. Your gold loan amount then is changed based on this new value.
If the current gold rates are higher, you will have the option to add the increased value to your loan, providing you with additional funds. However, if the gold rate is lower on the renewal date, your overall loan amount will decrease accordingly.
When you transfer your gold loan balance from another lender
Suppose you have a gold loan with another lender and are paying high interest charges. If you choose to transfer your gold loan to us for a lower interest rate, the loan amount offered will be based on the market rate for gold on the day you apply for the balance transfer, considering our competitive gold loan interest rate.
If the market rates for gold have increased since you took your original loan, you may receive a higher loan amount from us. However, if the rates have decreased, the offer will be lower. It is wise to plan your balance transfer on a day when the value of gold is higher.
