Creditors approve loans only on gold objects that exhibit the purity of 18 – 22 carat or above. In addition to this, if the ornaments have precious gems studded in the design, they will not be considered to decide the loan value.
all are accepted by HDFC Bank for availing a Gold Loan. Quality: The quality of gold should be between 18 Carat to 22 Carat. Any gold ornament which is 24 Carat, cannot be used for availing a gold loan.
Type of gold accepted
Most banks accept only gold jewellery. Also, the purity of gold provided as collateral should be between 18K and 22K.
For jewellery mortgage eligibility, you can deposit gold in any form, including jewellery, minted coins, and ornaments. The minimum purity of the deposited gold must be 18 karats—and up to a maximum of 22 or 24 karats. Minted gold coins are accepted only if they are 24 karats with a maximum weight of 50 grams.
A loan given against your gold jewellery is usually known as gold jewel loan. The most common type of loan against jewellery is gold loan. Here, the borrower takes the loan against his/her gold ornaments and jewellery, at a set interest rate.
If you are in need of a loan, and if you are confident of your ability to repay the loan on time, you can unlock the value of these assets by taking a loan against gold. You offer the lender your gold. The lender gives you a loan against your ornaments after a quick evaluation of its purity.
Gold Valuation
In the case of a gold loan, the financial institutions can sanction a credit limit of up to 75% of the market value of the gold mortgaged. The loan to value ratio, in this case, is capped by the Reserve Bank of India. The customer can then withdraw this amount at any point in time.
To obtain the loan you need to submit your gold jewellery (within a karat range of 18 to 24 k) at the branch. The loan amount that is sanctioned will be based on the gold valuation which involves verification of its purity. The weight of stones etc. fixed on the ornaments will be deducted for the purpose of valuation.
The jewellery loan based on the purity of the gold can be approved by the lender depending upon its weight. Based on that, the market value of gold is determined, keeping in mind the current rate. Up to 90% of the pledged gold items can be sanctioned as finance amounts.
Banks are allowed to offer loan against gold ornaments and other jewellery and specially-minted gold coins sold by banks. However, they cannot lend for purchase of gold in any form. Banking analysts say that banks have been giving gold loans in the small-ticket category against jewellery.
Therefore, in India, creditors prefer to take gold ornaments as collateral. Banks neither accept gold bars nor gold bullion for gold loan. You can avail gold loan against gold coins but they must be 99.99% pure with weight not exceeding 50 grams.
Any person engaged in agriculture or allied activities as well as persons engaged in activities permitted by GOI /RBI to be classified under agriculture. The applicant should satisfy the KYC guidelines & loan will be given based on declaration.
Most of the lenders, do not offer a loan on diamond jewelry, but some lenders offer a loan on 18 karat Gold and diamond ornaments. Here you will be getting loan amount on the basis of gold content, not on diamonds. Some private Jewelers provide loans against diamond Jewelry. But, the interest rate will be quite high.
As per extant instructions, banks are currently permitted to grant advances against gold ornaments and other jewellery and against specially minted gold coins sold by banks.
You can avail a Gold Loan from HDFC Bank with interest rate starting at 8.50% p.a. and loan amount starting from Rs. 10,000. The repayment tenure offered is up to 2 years and with a processing fee charged at 1% of the loan amount.
If you pledge gold ornaments, only gold portions are used for calculating the value; other metals, stones and gems are excluded from the calculations by the lender. In case you take a gold loan against 24 carat gold coins, they should have been issued by banks.
The Reserve Bank of India (RBI) on Thursday relaxed gold lending norms, allowing lenders to give up to 90% of the value of the gold pledged as loans. Currently, banks can lend up to 75% of the value of gold jewellery and ornaments.
Just don't try to use your luxury item (diamond ring, expensive jewelry, etc.) at your local bank. They'll accept vehicles, property, investments, future payments and even insurance policies – but when it comes to jewelry, you can pretty much forget about it.
Most lenders, do not offer a loan on diamond jewelry, but some lenders offer a loan on 18 karat Gold and diamond ornaments. Here you will be getting the loan amount on the basis of gold content, not on diamonds. Some private Jewelers provide loans against diamond Jewelry. But, the interest rate will be quite high.
The buyback of solitaire diamonds will be offered at 90 per cent of prevailing rates as per 'Nationwide Standard and Transparent Price List', which makes it a very transparent process, at Muthoot Gold Points, he said.
Loan application can be made online or by visiting the bank branch. Only specifi c branches can provide gold loans. Photograph, PAN, identity proof and address proof have to be provided with application. Once the application is submitted, a gold loan agreement is signed between the customer and the bank.