What Do You Mean By Appraisal Of Gold Loans?
Gold is a common household name in India. People consider it a pride in good times and a haven in adversity. While you can wear it as a status symbol, you can easily leverage it as collateral to obtain a gold loan.
A loan against your gold jewellery or articles is known as a gold loan. It is a secured loan where the gold acts as collateral in return for the required money. The interest rate is lower for this type of loan. It is also known as a multi-purpose loan as it does not impose any restrictions on usage.You can get a gold loan from a traditional bank or an NBFC within a few hours. The weight and value of the gold you keep as collateral determines the loan amount.
What Do You Mean By Gold Loan Appraisal?
The gold loan process is simple, with quick disbursements. After submitting your gold loan application, lenders check the purity of the collateralised gold. The gold loan amount depends on this collateralised gold.According to the RBI guidelines, the gold loan amount should be at most 75% of the pledged gold, known as the loan-to-value ratio. Additionally, the gold purity of the pledged asset should be between 18 to 24 carats. Here, appraisers perform the purity check on the gold you want to put down.
For example, a borrower wants to pledge 10 gm of 20-carat gold as collateral for a gold loan. The market value of the gold at this time is Rs. 53,000. Now, the lender will independently verify the purity of this piece of gold. Assuming the purity turns out to be 20-carat, with an LTV of 75%, the borrower would receive a maximum loan amount of Rs. 47,700 (53,000 x 75%).What Are The Factors Affecting The Gold Loan Valuation?
A few determining factors for the gold loan valuation include the following.• The prevailing market rates
• The acceptable purity for a gold loan ranges between 18-24 carats
• In the case of pledging jewellery, the gold loan amount depends on the gold element and does not include any stone or diamonds attached to it
Frequently Asked Questions
Q.1: What is a gold appraiser in gold loans?
Ans: A gold appraiser is generally a professional who verifies the gold purity before approving a gold loan.
Q.2: What is the loan-to-value ratio?
Ans: A loan-to-value ratio or LTV determines the eligible loan amount with the appraised value of your gold collateral. The maximum LTV for a gold loan is 75%, set by the Reserve Bank of India.
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