Gold loans have emerged as a popular financing option, especially recently, due to accessible credit and minimal documentation. If you're considering a gold loan, it's helpful to understand what factors determine the gold loan max value you can get per gram of gold pledged.
The type and characteristics of gold jewellery play a crucial role in influencing the per-gram value. This article will provide insights into how ornament type, carat/purity level, weight, and other attributes impact the value you can unlock with a gold loan.
Which Gold Jewellery Fetches the Highest Loan Value?
Based on purity level, design and additional factors, the following gold ornament types fetches the gold loan max value:
1. Plain Gold Jewellery
Plain gold chains, necklaces, bangles, and rings with minimal design and no stones generally have high purity levels between 20 and 22 carats. Their valuations are highest on a per-gram basis for gold loans.
2. Gold Bars and Biscuits
These contain 24 carat (99.9%) pure gold and have among the highest valuations for raising credit against gold. Hefty weights further maximise their loan eligibility.
3. Kundan Style Gold Jewellery
Traditional Kundan ornaments involve setting stones in pure 24K gold, resulting in high gold content and purity. Their high value makes them ideal collateral for gold loans.
4. Temple Jewellery
Temple jewellery, such as necklaces, armlets, and waistbands, uses a minimal design of 22K or 24K gold. Their high purity content fetches excellent valuations for gold loans per gram.
How Is Gold Jewellery Valued for Loans?
Financial institutions follow a systematic process for evaluating gold ornaments to determine the credit limit and loan amount:
- The jewellery is checked for authenticity, and hallmarking is done to confirm the purity level.
- The gross weight of the ornaments is measured in grams.
- Any additional stones, gems or decorative extras are excluded to determine net gold weight.
- Purity level (in carats) and prevailing market gold rates are applied to calculate ornament value.
- The maximum permissible loan amount is sanctioned based on the regulatory loan-to-value ratio.
Gold Jewellery with Lower Value per Gram
The following ornament types have comparatively lower gold content and value:
- Antique jewellery with delicate filigree work, carvings and lower gold purity.
- Studded jewellery with diamonds, gems and precious stones that increase weight without adding gold value.
- Fashion jewellery of 18K purity with more alloy mixing. Intricate contemporary designs also minimise actual gold weight.
- Oxidised jewellery, where the gold surface is blackened through chemical processes, reduces shine and value.
Why is Higher Purity Preferred for Gold Loans?
Higher gold purity levels result in better valuations and gold loan rates per gram for the following reasons:
- 24K gold is 100% pure with no other metals present. This maximises gold content and value.
- 22K has a 91.7% gold purity, while 18K contains just 75% gold in the alloy mix.
- More alloy mixing to create 18K jewellery reduces actual gold weight and net value.
- 18K gold has more base metals, making it softer and prone to wear faster and damage.
- Hallmarking guarantees the stated purity level. Higher purity satisfies financial institution standards better.
- RBI regulations for gold loans specify acceptable purity levels starting from 22K and above.
Conclusion
The type of gold jewellery you pledge determines the valuation and gold loan maximum value amount you can raise per gram. Plain 22K or 24K jewellery, gold biscuits, and traditional Kundan or temple ornaments fetch the highest values. Avoid delicate and gemstone-studded jewellery. Select pieces with high purity levels and maximum weights and get them correctly hallmarked. With these tips, you can get the best loan value against your gold.
FAQs
1. Which purity level of gold gives the highest loan value?
24K (99.9% pure) gold, followed by 22K (91.7% pure), gets the highest valuation per gram for gold loans.
2. What is the minimum gold purity acceptable for loans?
RBI regulations require ornaments to have a minimum content of 22K to be considered for gold loans.
3. Does studded jewellery get the same value as plain gold?
No. Diamond—and gem-studded jewellery valued only for its gold content fetches lower loan amounts than plain gold items.
4. Can I get a loan against old antique jewellery?
Yes, but the valuation would depend on purity, hallmarking and ornament condition.
5. Can I get a better rate by pledging gold coins instead of jewellery?
Generally, gold coins and bars with 99.9% purity get the highest LTV ratios and maximum loan eligibility per gram of gold content.
