The prospect of a gold loan has become a popular choice for those in need of quick funds. The reason being, gold investments are prevalent, and converting them into monetary resources seems a logical choice. But how is the gold loan amount calculated, and what determines your eligibility? Understanding these factors can be simplified using tools such as a gold loan calculator.
A gold loan calculator is an online tool that helps one derive an estimation of the loan amount they can get against their gold. It requires some pertinent details like the weight and purity of the gold, current gold rate, loan tenure, and the lending institution's meg.
Eligibility for a gold loan, which is typically 60-75% of the gold value, is primarily determined by the quality and quantity of the gold you pledge with the bank or lending institution. Individuals from across various demographics are eligible without any bar based on income or credit score.
The gold loan's amount calculation uses a simple method. Your gold jewelry or gold coin is first appraised for its weight and purity. The appraiser then multiplies the resultant value with the current gold rate to derive the market value of the gold. The loan amount is then calculated by applying the loan-to-value ratio, which ranges between 60-75% of this value.
It's crucial to note that only gold of certain purity is considered eligible. For instance, the requirement typically stands at 18 to 22 karats. Therefore, if you're depending on a gold coin to secure a loan, ensure its karat rating beforehand.
Remember that other aspects, including repayment capacity and personal profile, may also be evaluated during the loan approval process. And while the interest rates on gold loans significantly lower than personal loans, they should nonetheless not be glossed over.
Tapping into the power of a gold loan calculator can provide you with a clear picture of your potential loan amount. Ultimately, it's about making informed decisions and using your gold coin or jewelry effectively to meet your financial needs.