In these uncertain times, everyone is looking for financial security and stability. One of the ways by which you can acquire quick and immediate funds for personal or business need is through gold loans. One prominent term that you will undoubtedly encounter when considering gold loans is the 'gold loan amount per gram'.
The gold loan amount per gram refers to the actual amount of loan that a borrower is eligible to receive in exchange for each gram of gold pledged. The significant factor determining this amount is the current market price of gold. Understanding the concept of per gram loan amount is crucial as it helps you estimate the total loan amount you can generate from your gold assets.
Let us delve deeper into understanding how the gold loan amount per gram is calculated and how you can maximize your borrowing.
Assessing and Understanding Gold Loan Amount Per Gram
To begin with, it is important to note that the valuation of gold rate varies from city to city. For instance, the gold rate today in Indore might not necessarily be the same as in Mumbai. Depending on the local gold market dynamics, the price fluctuates daily. This fluctuation has a direct impact on the gold loan amount per gram.
To calculate the gold loan amount per gram, lenders consider the average gold rate of the preceding 30 days. However, the percentage of the loan extended per gram of gold is usually capped at around 75% of the total value, adhering to the Reserve Bank of India's guidelines.
For instance, if the gold rate today in Indore is INR 3000 per gram, the maximum loan you can receive per gram of gold is 75% of INR 3000, i.e., INR 2250. Therefore, the more gold you pledge, the higher the loan amount you can generate. It is advisable to keep track of gold rates in your city to estimate your borrowing capacity accurately.
Maximizing Your Borrowing
Understanding the gold loan amount per gram is the first step towards maximizing your borrowing. Following are some tips that can help you maximize the loan amount:
1. Monitor the Gold Rates: The gold rates can be volatile. Therefore, it is essential to stay updated with the daily gold rates. Higher the gold rate, higher will be the per gram gold loan.
2. Quality of Gold: The quality and purity of your gold also play an essential role in determining the gold loan amount per gram. Lenders usually prefer gold of 18 carats and above.
3. Weight of the Gold: The weight of the gold is a critical deciding factor for the loan amount. More amount of gold pledged will lead to a higher loan amount.
4. Bargain: It's always important to bargain with the lender. They may provide you loan at more than the standard limit of around 75% of the total value per gram.
In conclusion, the gold loan amount per gram is a dynamic value that changes according to the current gold price, local market dynamics, and your negotiation skills. Understanding how it works can help you maximize your borrowing, offering you a safety net in times of financial emergencies.
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The pledge of gold is an excellent way to unlock the potential of your idle assets, particularly in cities like Indore where the gold rates are often attractive. Just remember, it is prudent to borrow only as much as you need and rigorously plan your repayments to ensure a hassle-free loan journey.
The concept of a gold loan amount per gram may appear complex initially, but once you understand its dynamics, you can make the best use of your gold assets, leveraging them to secure higher loan amounts when required.