How To Get The Highest Value For Your Gold Pledge
One can get up to 90% of the value of their pledged gold from some lenders. Read on to know how to get highest value on your gold pledge at IIFL finance.

A loan against your gold ornaments, jewellery, or articles, is generally known as a secured loan. You can get up to 90% of the value of your pledged gold from some financial institutions. This high permissible loan-to-value (LTV) ratio helps improve the borrowing capacity of individuals. Additionally, the Indian government increased the loan-to-value percentage further to support entrepreneurs and households severely affected by the pandemic.
What Is A Gold Loan?
Gold has been a saviour for many Indians, from weddings to festivities to tough times. People’s trust in gold has made it the most valuable commodity today. It is popularly known as a haven for various reasons. One of the most important ones is its liquid nature. It is easy to convert into cash and get a gold loan.A loan against your valuable gold in any physical form is known as a gold loan. In this type of loan, gold acts as collateral for your cash needs.
How To Get The Highest Value For Your Gold Pledge?
Various factors determine the sanctioned loan amount of your gold pledge. The most crucial characteristics include:1. Loan-To-Value Ratio
This ratio helps a secured loan provider assess the lending risk. It is the percentage of the gold value that a financial institution can lend a borrower. The Reserve Bank of India (RBI) has set a cap on the loan amount limit at 90% of the collateralized asset.2. Gold Purity
The quality of gold jewellery is measured in carats (K) and ranges from 18K to 22K. The weight of jewellery pledged in 18K gold differs from that of ornaments in 22K gold. People who pawn 22k gold jewellery receive higher funds than those who pawn 18K jewellery.3. Weight Of Gold
Lenders consider only the gold value of the ornament and not other precious stones like diamonds during the loan amount calculation. They exclude such pieces to assess the weight of the gold. A minimum of 10gm gold is necessary to avail of the gold loan.Get Gold Loan at the comfort of your home
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Gold bars and bullions are not acceptable as collateral in a gold loan.5. Current Rates
The market price of gold fluctuates daily. Guidelines set by the RBI require lenders to use the price of gold per gram over the past 30 days to determine gold grades.Other Factors Affecting Your Gold Loan
Some other factors that affect the loan amount are:1. Eligibility:
The borrower should be above 18 years and must have an adequate amount of gold. Only 90% of the gold value is provided as a loan.2. Interest Rates:
This rate varies from lender to lender based on the borrower’s credit risk. Along with credit risk, loan tenure and loan amount also plays an essential role in calculating the interest rate of the gold loan.3. Additional Cost:
In some cases, there is an additional cost of around 2.25% in case of loan prepayment.Apply For A Gold Loan With IIFL Finance
IIFL Finance is a leading gold loan lender. Since its inception, it has achieved a hassle-free experience for various gold loan borrowers. We have successfully provided gold mortgage loans to 6 million satisfied customers who received their funds efficiently.IIFL offers competitive interest rates and flexible gold loan repayment terms for short-term gold loans. We also ensure the safety of your collateralized physical gold until complete repayment. There are absolutely no additional costs at the redemption of your gold mortgage. If you have any questions, you can contact our 24-hours customer service team via phone or live chat.
Getting a gold loan has never been easier! Walk into any of our branches pan India, fill out an e-KYC and get your loan approved in under 30 minutes.
Frequently Asked Question
Q.1: What is a gold loan?
Ans: A loan where you pledge your gold ornaments and articles to receive funds is known as a gold loan. Gold articles act as collateral in a gold loan.
Q.2: What is the loan-to-value ratio?
Ans: The loan-to-value ratio is essentially an assessment of lending risk performed by the secured loan provider. It determines the percentage of the gold value that a financial institution can lend a borrower. The RBI has set a cap on the loan amount at 90% of the collateralized asset.
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Apply NowDisclaimer: 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.