How Does the Valuation of Gold Affect My Instant Gold Loan Amount?

The valuation of gold is a key factor that determines the maximum loan amount you can avail of with an instant gold loan. Here is how gold value impacts the loan amount:

• The gold articles are appraised by the loan provider based on purity level and prevailing market rates to arrive at a fair market value.
• Typically, financial institutions provide loans up to 75% of this appraised gold value. This is called the maximum Loan-to-Value (LTV) ratio.
• Higher gold purity means higher gold value. So pure gold ornaments (22K-24K) get higher appraisals compared to lower purity gold (18K).
• Greater gold weight will translate into higher market value during appraisal. Jewellery with heavier gold content can fetch larger loan amounts.
• Rising gold prices lead to higher appraised value of collateral. At peak prices, the same gold could qualify for a bigger loan amount.
• Older traditional jewellery may get lower appraisals if the designs are outdated or lightweight compared to current trends.
• Valuation methodology varies across loan providers. Comparing quotes from different financial institutions can help get the best LTV ratio.