It is a common misconception that diamond-studded jewellery automatically qualifies for a significantly higher loan amount than plain gold. In reality, the valuation process for "stone-studded" jewellery follows a very specific set of rules.
When you apply for a loan against diamond jewellery, lenders follow strict guidelines. The loan amount is determined primarily by the gold content—not the diamonds or design value.
This article explains how a loan against diamond jewellery actually works, how lenders value such pieces, what counts under gold loan eligibility, and why diamonds are treated separately under the gold loan process.
Can You Get a Loan Against Diamond Jewellery?
Loans against jewellery are typically structured around gold that has a standardised valuation and high liquidity. In practice, most lenders evaluate jewellery based on its gold content, as gold prices are transparent and widely accepted as collateral.
When diamond jewellery is pledged, the loan amount is usually calculated only on the weight and purity of the gold used in the ornament. The value of the diamond itself—despite its craftsmanship or market price—is generally not considered while determining the eligible loan amount. This is because diamond valuation can vary significantly based on cut, clarity, colour, and certification, making it less predictable for lenders.
As a result, while diamond-studded jewellery can be pledged, borrowers should be aware that the sanctioned amount reflects the gold value rather than the full market value of the jewellery.
The final loan amount depends on:
- The net gold weight (after stone deduction)
- The purity of the gold (karat level)
- The prevailing market price of gold
- The applicable loan-to-value (LTV) ratio
Understanding this upfront helps you set realistic expectations before applying.
How the Calculation Works
Lender follows a process called stone deduction. Here is how it works:
- The entire jewellery piece is weighed.
- The estimated weight of diamonds and other stones is deducted.
- The remaining net weight of gold is calculated.
- The purity (18K, 22K, etc.) is verified.
- The loan amount is determined based on the current gold price and LTV ratio.
Gold Loan Eligibility for Diamond Jewellery
Your eligibility depends entirely on the gold content of the jewellery.
Most lenders require:
- Minimum purity of 18K
- Minimum gold weight of 5–10 grams
- Valid identity and address proof (KYC compliance)
As per RBI norms, lenders can offer up to 75% of the assessed gold value. This applies only to the gold portion, not the diamonds.
If your jewellery contains a low gold-to-stone ratio, your eligible loan amount may be lower than expected.
Gold Loan Process for Diamond Jewellery
While diamond-studded pieces require a more careful physical inspection than plain gold, the lending process is designed to be swift and transparent.
- Application Submission: You start by submitting a basic application through the lender’s app or website. Most platforms provide a provisional quote based on the gold weight and purity you describe.
- Physical Valuation & Assaying: You bring the jewellery to the branch, where a trained professional uses analysers to verify the gold’s purity (18K, 22K, etc.).
- Issuance of Purity Certificate: Before the loan is sanctioned, the lender must provide you with a certificate detailing the gross weight, the stone deduction, and the final net weight used for the loan.
- LTV Application & Confirmation: The lender applies the current market rate to your net gold weight.
- Instant Disbursement: Once you accept the terms, the loan agreement is digitally signed, and the funds are credited to your bank account.
- Repayment & Asset Release: After you repay the loan, the lender generally releases your jewellery within a few days.
Conclusion
A loan against diamond jewellery is possible, but it works very differently from what most people expect. Since a diamond value is fixed, the loan amount depends only on the gold's purity and weight.
Understanding the valuation method, gold loan eligibility, and repayment terms helps you decide whether pledging such jewellery fits your funding needs.
Apply for a Shriram Gold Loan today and move forward with clarity, knowing how your jewellery is valued and financed.
FAQs
Can I pledge diamond jewellery for a gold loan?
Yes. Diamond jewellery can be pledged, but only the gold portion is considered for the loan amount.
Is the value of diamonds considered in the loan amount?
No. Diamonds and gemstones are excluded entirely from valuation.
What is the minimum gold content required in diamond jewellery for a loan?
Most lenders require at least 5–10 grams of gold with a minimum purity of 18k.
How is the gold portion of diamond jewellery valued?
Through purity testing, gold weight measurement, and the current market price per gram.
Are there any restrictions on the type of jewellery accepted?
Yes. Very ornate designs or pieces with low gold density may be declined.
What documents are needed to apply for such a loan?
Basic identity and address proof, along with the jewellery for valuation.
Is the loan amount lower for diamond-studded jewellery compared to plain gold?
Yes. Since diamond value is ignored, loan amounts are often significantly lower.