Gold Loan Eligibility Calculator

Gold loans have surged in popularity in recent years. In India, gold is more than just a luxury, it's a dependable resource you can use to obtain loans. The eligibility for a gold loan depends on the quantity and quality of gold you possess.

Gold loan eligibility refers to the maximum loan amount you can secure against your gold ornaments. The gold's value is determined by its purity (excluding dirt) and weight, which is then multiplied by the per-gram market rate.

What is Gold Loan Eligibility?

It is the loan amount you can avail of against your gold, calculated based on the weight and purity of the gold, as well as the current gold rate. 

Here are several ways an online gold loan eligibility calculator can assist you: 

1. Estimate of loan amount: The most direct advantage of a gold loan eligibility calculator is that it allows you to get an estimate of the loan amount you may be eligible for. The weight and purity of the gold, as well as the current gold rate, will determine the amount you can avail of.   
2. Comparison across lenders: Different lenders may offer varying LTV (Loan-to-Value) ratios, impacting the amount of loan you can get against your gold. Shriram Finance provides 75% LTV, meaning the loan amount for which you are eligible is 75% of the value of the gold you provide to lend.
3. Plan your loan: With a clear estimate of how much loan you can get against your gold, you can better plan your finances, determining if the gold loan will sufficiently cover your needs or if you should look for additional sources of funding.
4. Quick and convenient: The Shriram gold loan eligibility calculator offers a quick and easy way to get an idea of your potential loan amount, without having to visit a lender's office or wait for an appointment. It's available 24/7 and provides instant results.

Example: Let's say you're planning to start a small business that requires an initial investment of ₹2,00,000. You've saved ₹50,000 and need an additional ₹1,50,000. You have gold ornaments weighing 40 grams and of 22-karat purity. Let's assume that the rate per gram of 22-karat gold is ₹5,500, and the financial institution offers a 75% LTV ratio.

By using a gold loan eligibility calculator online, you discover that you're eligible for a gold loan of ₹1,65,000 (40 grams x ₹5,500 per gram = ₹2,20,000 x 75% LTV = ₹1,65,000, considering the gold loan rate per gram and the LTV ratio set by the financial institution). This allows you to go ahead with your business plan, using the gold loan to cover the remaining expenses.

Note: The rate per gram of gold changes based on market conditions. Therefore, the example given above is just to help you understand the process, and may not reflect the actual rates.

What is a Gold Loan Eligibility Calculator?

Tools like the gold loan eligibility calculator come into play to aid borrowers in understanding how much loan they can secure. It is designed to give you an estimate of the loan amount you can avail of against your gold.

Process to Use the Gold Loan Eligibility Calculator

Calculating your gold loan eligibility involves a few steps:

1. Assess the purity of your gold: Gold loans are only given against gold of 22 karats or above.
2. Weigh your gold: The weight of your gold directly impacts the loan amount.
3. Use the calculator: With the gold’s weight and purity, you can use the calculator to determine the potential loan amount. 

How Does a Gold Loan Eligibility Calculator Work?

A gold loan eligibility calculator helps you quickly estimate the loan amount you could potentially secure against your gold. Using a gold loan eligibility calculator is straightforward and typically involves the following steps:

1. Find the calculator: Head over to the Shriram website and navigate to the gold loan eligibility calculator.
2. Input gold weight: Enter your gold weighs in grams.
3. Choose gold purity: Pick the purity level of your gold, which can range from 22K to 24K. If you're unsure about the purity, you may need to get it assessed by an expert.
4. Provide information: After you've input these details, press 'Calculate' or 'Submit'.
5. Access results: The calculator will now estimate the highest loan amount you could qualify for. It does this based on the info you provided.

How to Calculate Gold Loan Eligibility?

Calculating your gold loan eligibility involves a few critical factors. Here's how to do it:

1. Understand the LTV ratio: The Reserve Bank of India (RBI) has capped the LTV ratio for gold loans at 75%. This means that lenders can offer you up to 75% of the value of the gold you pledge.
2. Know gold's weight and purity: The weight of your gold is one of the most crucial factors in determining your gold loan eligibility in India. The purity of your gold is equally important, as lenders only consider the pure gold content of your jewellery or coins when calculating your loan eligibility.
3. Consider current gold prices: Gold prices fluctuate, and this can affect the loan amount you are eligible for. Lenders consider the current market price of gold when determining your loan eligibility.
4. Calculate gold loan eligibility online: The Shriram gold loan eligibility calculator can make this process simpler. You just need to input the weight and purity of your gold, and the calculator will provide an estimate of the loan amount you are eligible for.

Gold Loan Eligibility Calculation Formula

The gold loan eligibility per gram is calculated using the formula:

Gold Loan Eligibility (₹) = Weight of Gold (grams) x Purity of Gold (karats) x Rate per gram x LTV (Loan to Value ratio)

It's crucial to remember that the calculated value will likely be less than the market value of the gold. This is because lending institutions lend up to a certain percentage of the gold's market value, referred to as the LTV ratio.

What are the Eligibility Criteria for a Gold Loan?

The gold loan eligibility criteria can vary from one financial institution to another. Some common criteria include the following:

• You must be at least 18 years old.
• The gold pledged should have a purity of at least 22 karats.

What are the Documents Required to Apply for a Gold Loan?

To apply for a gold loan, you need to submit a few key documents to verify your identity, address and income.

1. Identity Proof: 
   • PAN (Permanent Account Number) card
   • Aadhaar card
   • Voter's identity card
   • Passport
   • Driving licence
2. Address Proof: 
   • Utility bills (electricity, telephone, etc.) - not older than three months
   • Aadhaar card
   • Passport
   • Voter's identity card
   • Ration card
   • Driving licence
3. Income Proof: While not always required, some lenders might ask for proof of income to assess your repayment capacity. This could be:
   • Bank statements for the past six months
   • Salary slips for the last three months
   • Income tax returns
4. Photographs: Usually, two recent passport-sized photographs are required.
5. Application Form: The gold loan application form should be duly filled in with all the necessary details.
6. Signature Proof: Any document approved by the government, with your signature, must be submitted.

Benefits of Gold Loan Eligibility Calculator

A gold loan eligibility calculator in India is an invaluable tool that helps you understand the potential loan amount you can secure against your gold. Here's how it benefits you:

1. Instant results: The gold loan eligibility calculator gives you immediate results. Once you enter the weight and purity of your gold, the calculator provides an instant estimate of the loan amount you might be eligible for.
2. Comparison: The gold loan eligibility calculator can assist you in comparing potential loan amounts based on variations in tenures, gold weights, and purities.
3. Intuitive and easy to use: This calculator provides a swift and reliable way to determine the loan amount you are eligible for, thanks to the use of accurate algorithms and an easy-to-use interface
4. Hassle-free loan estimation: Shriram Finance's gold loan eligibility calculator requires just a few details to provide accurate results, saving you time and effort.

Conclusion

Gold loans are an efficient and convenient way to address your immediate financial needs, capitalising on an asset that often lies idle in your safe.

Among the various options available, the Shriram gold loan eligibility calculator is an excellent tool that can help you calculate your potential loan amount quickly and accurately. It's time to turn your idle gold into an active financial asset with Shriram Finance gold loans.