Gold Loan: To get the best gold loan, you need to put in some effort. To maximize your loan amount, pledge high quality gold (22K or 24K) if possible. Comparing multiple lenders can help you get the best deal.
Gold Loan: When you need to fulfill a financial obligation on a special occasion or in an emergency and you do not have enough funds, a gold loan can be a quick resource. It is worth noting that the amount of gold loan you will get depends largely on the purity of the gold. The higher the purity, the higher the amount you can borrow, the lower the loan amount. Let us understand the impact of gold purity on a gold loan here.
Meaning of Gold Purity
The purity of gold is measured in carats. It is represented by K. 24K gold is the purest, containing 99.9% gold. The higher the purity of gold, the softer or more fragile the gold jewellery made from it will be. This is the reason why other metals are mixed with gold to improve its strength and durability.
- 24 carat (24K): 99.9% pure gold, which is rarely used in jewellery.
- 22 carat (22K): 91.6% pure gold, which is used in high quality jewellery.
- 18 carat (18K): 75% pure gold, which is often used in jewellery with intricate designs.
- 14 carat (14K): 58.3% pure gold, which is used in less expensive jewellery.
Gold loan and purity of gold
The higher the purity of gold i.e. gold carat, the higher its market value will be. This affects the loan amount you get per gram. That is, more purity means more price. As 24K gold is the purest, it commands the highest price per gram in the market. This makes 24K gold offer the highest loan amount per gram in gold loans. 22K gold offers a slightly lower loan amount than 24K gold due to its slightly lower purity. The same applies to 18K and 14K gold.
Keep these things in mind while applying
Getting the best gold loan will require some effort. According to ICICI Direct, to maximize your loan amount, pledge high quality gold (22K or 24K) if possible. Be aware of the assaying process used by the institution offering the gold loan and how it affects the valuation of your gold. Comparing multiple lenders can help you get the best deal.
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