Everything On Gold Valuations For Loans

Gold Valuation plays a major role in Gold Selling and Gold Loan Process. Know all about the gold valuation with IIFL Finance. Read Now!

19 Dec,2022 10:56 IST 2864
Everything On Gold Valuations For Loans

Indians cherish gold. They buy gold articles for religious and auspicious occasions. This yellow metal is further useful in acquiring a loan. A gold loan allows you to leverage the gold articles to raise adequate capital and cover various expenses. However, as gold prices fluctuate consistently, they directly affect the gold valuations on which the lender bases the offered gold loan amount.

What Are Gold Loans?

Lenders provide a certain percentage of the gold valuation as the loan amount they analyse based on its current market value. While taking a gold loan, lenders require borrowers to pledge the gold articles as collateral which they receive back after repaying the gold loan amount in full.

Like other loan products, lenders provide the gold loan amount based on the gold valuation with an interest amount. The borrower is liable to repay the gold loan principal amount with interest to the lender within the loan term.

Gold Valuation and Gold Loans: The Connection

In other loan types, lenders offer the loan amount based on the applicant’s income and other eligibility criteria. However, lenders evaluate the amount based on gold valuation for gold loans. Gold valuation is when lenders ascertain the actual monetary value of gold in the domestic market.

The gold value is calculated through the gold loan rate per gram on the loan approval day by the lender. At the time of application and pledging of the asset, the lenders analyse the quality and quantity of the gold and ascertain its value based on the current gold market price. Once they know the total gold valuation, they determine how much they can offer to the borrower.

However, in gold loans, the lenders can’t offer the entire gold valuation as the gold loan amount to the borrowers as they have to adhere to the Loan-To-Value Ratio set by the Reserve Bank of India. The Loan-To-Value ratio is the loan amount lenders offer a borrower after ascertaining the current value of the gold articles.

Currently, the Reserve Bank of India allows all lenders to have an LTV ratio of 75%. The LTV means that if the gold jewellery valuation is Rs 1,00,000, the lenders can offer 75% of the gold valuation, which is Rs 75,000 as the gold loan amount.

Factors Affecting Gold Valuation

Numerous factors affect the gold valuation today as gold prices fluctuate regularly, which can change the gold valuation and the loan amount that the lenders offer. Here are factors that affect the gold jewellery valuation when you can check the gold valuation online:
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• Demand and Supply:

Demand and supply highly influence the price of gold in the domestic market and, ultimately, the gold valuation today. If the demand for gold is higher than the supply, the price of gold increases. On the other hand, if the supply is higher than the demand, the price of gold decreases. With these fluctuations, the gold valuation also fluctuates.

• Interest Rate:

The Reserve Bank of India manages the economy and factors such as inflation and recession by increasing or decreasing the key interest rates, such as the repo or reverse repo rate. The prevailing interest rates also influence the gold prices and the resulting gold valuations because such interest rates have an inverse relationship with domestic gold prices.

How Can You Ensure You Get The Highest Gold Valuation For Gold Loans

Gold valuations or gold jewellery valuations are beyond the control of individuals and fluctuate based on domestic and international market factors. However, one thing gold owners can do to ensure the highest gold valuations for their pledged gold and to attain the highest LTV is to constantly check the gold valuations online.

Numerous websites contain a section called ‘gold valuation today’ that lists the gold rate per gram for various qualities of gold, such as 22-carat gold, 24-carat gold, etc., to provide a way for gold owners to know when the gold price is the highest. The higher the gold price, the higher the gold valuation. This way, you get the highest loan amount possible to cover your expenses.

Avail Of An Ideal Gold Loan With IIFL Finance

With IIFL Gold loan, you get industry-best benefits through our process designed to offer instant funds based on the value of your gold within 30 minutes of application. IIFL Finance Gold Loans come with the lowest fee and charges, making it the most affordable loan scheme available. With a transparent fee structure, there are no hidden costs you have to incur after applying for the loan with IIFL Finance.

FAQs:

Q.1: Can I get a Loan-To-Value Ratio higher than 75% when taking a gold loan?
Ans: No, every lender has to adhere to the 75% Loan-To-Value ratio set by the RBI. You can get a higher loan if the gold jewellery valuations are higher depending on the gold valuations today or on the day of application.

Q.2: How can I apply for a Gold Loan with IIFL Finance?
Ans: Getting a gold loan from IIFL Finance is super easy! Click on the ‘Apply Now’ button mentioned above and fill in all the required details to get a loan approved in few minutes.

Q.3: How will I get my pledged gold articles back from IIFL Finance?
Ans: IIFL Finance invests heavily in keeping the pledged gold articles safe. Once you repay the loan amount in full, we will return your gold articles automatically.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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