How To Get The Highest Value For Your Gold Pledge?

A financial emergency is one that you didn’t plan for. We usually anticipate and plan for milestone responsibilities such as your children’s higher education, marriage, retirement, etc. However, not everything goes to plan always. With rising inflation and a rapidly changing world, our savings may not be enough for those anticipated goals. A specialized education, a sudden illness, or a business capital requirement may force us to seek financing from outside. Almost every Indian household has gold articles that haven’t been used for long. In the past few years, gold loan lenders have become quite popular as you can get funding against the gold without needing to sell them off.

A gold loan is a secured loan against pledged gold jewellery. It is one of the quickest and safest ways to secure funding to meet a financial need. The sanctioned loan depends on the gold value per gram of the pledged gold. Before you decided to avail of a gold loan, you should be aware of how to get max value out of your gold for the loan.

Gold Loan Valuation

The Reserve Bank of India has permitted lenders to lend up to 75% of the value of gold ornaments, with some lenders lending up to 90% as well. This high Loan to Value Ratio has spurred borrowers to view gold loans as an attractive option to secure funding. Most lenders have online gold EMI calculators that you can easily use to determine your estimated EMIs. To get the best valuation of the gold loan, you must be aware of the key determinants in the sanction of your gold loan amount.

• Purity of Gold: Gold jewellery is made of 18k-22k pure gold as 24k gold is quite soft and unsuitable for making ornaments. Purer the gold, the better the gold loan rate per gram. This means the loan value shall differ for a person pledging 22k gold from a person pledging 18k gold.

• Weight of the Gold: While pledging gold ornaments, it should be noted that only the weight of the gold in that particular ornament is considered. This means the weight of other precious stones embedded in the article is not considered. So, it is always better to pledge gold jewelry made of only gold without embellishments as the lender shall remove the precious stones before weighing the gold ornament.

• Loan To Value (LTV) Ratio: The LTV Ratio helps lenders assess their lending risk to a particular borrower. It is the percentage of the gold value that a financial institution can lend a borrower.

• Type of Gold: Lenders accept only gold ornaments and not gold bars and bullion as collateral for loans against gold.

• Gold Loan Rates: The rates of gold fluctuate daily which impacts the gold loan value per gram which in turn, affects the gold loan per gram amount.

Apart from the above, the gold loan amount sanctioned to you shall depend on the following factors as well.

• Eligibility: Any person above 18 years of age with gold to pledge is eligible for a gold loan. You can easily calculate your gold loan eligibility online on the lender’s website.

• Interest Rates: The gold loan interest rates could vary with various lenders. The interest rate affects your EMI as well. Muthoot Finance rates of interest for gold loan promise to be the most competitive and lucrative.

• Additional Charges: Before availing of a gold loan, always make sure to check for processing fees, prepayment or foreclosure charges, etc.

Muthoot Finance Gold Loan

Muthoot Finance is one of the pioneers of the gold loan industry. With a plethora of gold loan schemes, customer-friendly initiatives, and prompt service, availing of a gold loan has never been easier. You can easily check your loan eligibility online with Muthoot Finance’s gold loan calculator.