How banks check the purity of Gold in Gold Loan

A gold loan is easily granted to the applicant. Gold is a very precious asset which can be used to avail loan from any bank or non-banking financing companies(NBFCs). Banks and non-banking financing companies follow a standard method to determine the value of gold accepted as collateral given by the borrower. Gold rate today 48,270.00 Indian Rupee for 10g of 24k gold. The gold rate keeps fluctuating depending on various factors like economical factors, demand and supply, market conditions, government policies and many others. 

Taking a loan during a favourable market condition of the gold can be beneficial. Gold loans have helped so many people around the country. It can be used to fulfill daily needs of the borrower. It is a good temporary solution in times of financial difficulties.  After the verification of the documents the loan is sanctioned easily into the applicant’s account.

The evaluation of the gold decides the loan amount. Banks and non-banking financing companies(NBFCs) follow a standard procedure for determining the value of the gold. The higher the purity of the hold the higher will be the loan amount sanctioned in the borrower’s account. The loan amount is directly related to the purity of the gold and the market price of the gold. Most of the banks and financing companies have in-house valuation teams and an online valuation method on their websites. The valuation can also be done by the applicant online which is very convenient. The online valuation process of the gold can help borrowers figure out the exact loan amount possible that can be availed. 

There are few points which a borrower must keep in mind for the evaluation of the gold. Few points to keep in mind while gold evaluation are given below:- 

• Gold Karats:- Gold quality is measured in karats (K). The higher the gold karat the higher will be the loan amount availed. Banks and non-banking financing companies accept gold between 18 Karat to 24 karat. Karat defines the purity of the gold. The lenders do not accept gold below 18 karats. One must make sure of the purity of the gold while applying for a gold loan. The amount of loan financed for high karat gold will be different from the loan amount financed for low karat gold. High larat of the hold can help the borrower to avail higher loan amounts.
  
  
• Weight of the gold:- It is one of the most important factors that are considered to zero down on the finance amount. Banks and non-banking financing companies accept at least 10 gm of gold for gold loan. The higher the weight of the gold the higher will be the loan amount availed from the financing companies. A borrower can get a higher amount of loan by pledging gold jewelleries that have a higher weight.
  
  
• The current gold per gram rate:- The market price of the gold keeps changing depending upon various factors. Banks and non-banking financing companies consider the average rate of the last 30 days of per gram rates of gold for the process of gold valuation. The market conditions are the important factors to consider while taking a gold loan. One should take a gold loan looking at the favourable market condition.
   

Conclusion

Banks and non-banking financing companies(NBFCs) consider a few points while evaluating a gold loan that includes the purity of the gold, market price of the gold, amount of the gold given to the bank and many other factors. Various banks provide amazing deals on gold loans like the Canara bank gold loan. One must accurately evaluate the gold given as the collateral to the banks and financing companies. These days the borrower can easily evaluate the gold online from the official websites of the banks. 

Also Read:- Gold loan Also Helpful For Medical Reasons