How is The Value of Gold Calculated For A Gold Loan?
Check how the value of gold for a gold loan is calculated at IIFL Finance. Know the multiple factors to determine the value of a gold loan.
Since time immemorial, gold has always lured buyers, primarily as a priced asset in India across all sections of society. Also, due to its feature of price appreciation, customers also look at gold as a means to safeguard themselves against any contingency owing to its strong liquidity power.
However, instead of liquidating gold jewellery, IIFL Finance offers a convenient option to customers who are looking to obtain cash just by pledging gold ornaments. IIFL Finance brings to you, IIFL Gold Loan, a quick way to raise funds while offering industry-best benefits such as, one of the lowest interest rates, attractive features such as, no requirement for a CIBIL score and the option of using the loan amount for either personal, business or medical purposes. All this, while not having to go through a lengthy and time-consuming application process which is simplified by making the application process online and hassle-free. Also, IIFL Finance’s Gold Loan at Home facility helps save time and costs for the applicants.
With IIFL Gold Loan, the ownership stays with the borrower when they apply for a loan and they also get the possession of their pledged gold ornaments on repayment of the loan.
For potential borrowers, it will be of interest to know how the value of gold for a gold loan is calculated. The value of a gold loan is determined by the following factors:
Gold Purity: The most important factor in determining the value of gold for a gold loan amount is the purity of the gold jewellery. Often, gold jewellery is not made of pure gold. Valuation is done based on the proportion of gold vis-a-vis the purity benchmark. Higher the percentage of purity, higher its value and thus, higher amount of loan sanctioned.
Weight of the Gold Jewellery: Only the weight of gold is considered when determining the value of gold. For accuracy, the weight is calculated on sophisticated karat metres. This weight excludes the gemstones and other materials in the gold ornaments. Higher the weight of pure gold, higher is the value of the gold loan amount.
Ongoing Rate of Gold: Lenders take into account the prevailing rate of gold for calculating the of gold and the gold loan amount. The rate of gold is determined by factors such as, demand-supply for the precious metal, inflation, geopolitical and economic conditions among others.
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Now that we know the factors determining the value of gold for a gold loan, it is helpful to know how a gold loan is calculated.
It is easy to calculate the eligible gold loan amount using the gold loan calculator given on IIFL Finance’s website. To derive this value, one has to provide the weight of the gold ornaments in either grams or kilograms. Depending on the prevailing market value of gold, the purity of the gold and the loan-to-value ratio, the gold loan amount is determined.
The Gold Loan calculator is a useful tool for customers to help them make informed decisions by assessing the amount of loan they can get from IIFL Finance.
Gold Loan Interest Rate
The gold loan interest rate on IIFL Finance’s website also can provide a fair idea of the applicable interest rate before applying for a gold loan. The interest rate is the determining factor before applying for a gold loan. Typically, it is between 11.88% and 27% p.a, translating into 0.99% p.m. However, the rates vary depending on the loan amount and the repayment frequency. Apart from this, IIFL Finance levies additional charges too. These are nominal charges for the services offered.
Some of the additional charges are, the processing fee that depends on the gold scheme one opts for, the MTM charges which are a flat Rs 500, auction charges of Rs 1,500 in the case of a default, and SMS charges of Rs 5 per quarter.
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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.
