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| May 13, 2024

Importance of Tola in Gold Measurements for Loan Valuation

Gold's allure has transcended cultures for millennia. This gleaming metal embodies not just wealth and beauty, but also a sense of security. In India, its significance goes even deeper. Woven into the fabric of our traditions, gold plays a central role in festivals and marriages, often seen as a wise investment.

Beyond its cultural importance, gold also serves as a valuable tool for financial planning. Many Indians, facing financial crises, turn to gold loans for quick access to cash. Here, their cherished gold ornaments become collateral, securing much-needed funds. However, when it comes to determining the value of these loans, a familiar unit takes center stage: the tola.

The tola might seem like a relic of the past, but its importance in loan valuation in India still remains undeniable. Understanding the tola, therefore, becomes crucial for anyone considering a gold loan. But before delving into its importance, understanding what exactly tola in gold means is critical.

Here is all you need to know about tola:

What is Tola in Gold?

Tola is an ancient gold measurement unit, used in India and other South Asian countries. It holds significant importance, used to measure the weight of gold and other precious metals.

The tola's historical significance dates back to the Vedic period when it was introduced to facilitate fair trade of grain and valuable metals like gold. The term 'tola' finds its linguistic origin in Sanskrit, where it signifies 'balance' or 'scale'. Over time, the tola has become a standard unit for measuring gold in countries like India, Pakistan, and Nepal, playing a crucial role in gold valuation and trad

How many Grams is 1 Tola Gold?

One tola is equivalent to approximately 11.6638 or 11.7 grams of gold. This conversion rate has been established for a long time, making it easier to translate between the traditional tola unit and the metric system grams, which is commonly used internationally. So, to convert tola to grams, you will need to multiply the tola value by 11.6638.

Although the weight of one tola gold is approximately 11.7 grams, in India, some jewellers might round the weight to 10 grams for simpler calculations.

As for the conversion of tolas to kilograms (kg), a 1 tola in Kg is equal to about 0.01166. Due to the small value, converting 1 tola in Kg is not practical for measuring gold jewellery. Grams provide a more manageable unit for these purposes.

Importance of Tola in Gold Measurements for Loan Valuation

Here is the importance of tola in gold measurement for loan valuation:

Determining the Loan Amount

There are several factors that influence the gold loan amount you can avail, one of which is the weight and purity of the gold being used as collateral. Any deviation from the expected weight and purity levels can result in a lower loan amount. Tola is one of the gold measuring units used in India, which means accurately measuring the gold in tolas is crucial for borrowers to secure the maximum loan value.

Suggested Read: How Are Gold Rates Determined In India?

Understanding Loan Eligibility

Gold Loan eligibility often has a minimum weight requirement. Since many people are still accustomed to using tolas for gold, it provides a familiar frame of reference when understanding the minimum threshold required for the loan you are interested in. This can help the buyer determine if it's worth pursuing the loan application or if they should explore other options.

Suggested Read: How Are Gold Loan Eligibility And Amount Calculated?

Is Tola Weight Still in Use Today?

Despite there being many other measurement units for gold, the tola remains an important unit of measurement, particularly in South Asian countries like India.

Beyond the gold and jewelry trade, the tola is also used to measure various household commodities such as sugar, grains, and spices in India and other South Asian countries.

However, as the emphasis on the use of modern metric units like grams increases globally, the importance of the tola as a measurement unit may gradually reduce over time. Though the tola may likely maintain a presence, especially in traditional markets and among older generations familiar with this historical unit of measurement

While there are many modern measurement units, understanding the tolas remains crucial for gold loan valuation in India. Tolas offer a familiar reference for weight, impacting loan amount and eligibility. However, as the world embraces grams, the tola's importance may gradually fade, becoming a symbol of cultural heritage.

If you are looking to apply for a gold loan, consider choosing Muthoot Finance to avail of one. Being the most trusted financial services company, we offer quick loan disbursement by simply fulfilling basic eligibility requirements and submitting a few documents. Visit your nearest Muthoot Finance branch to know more.

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