How is the Eligible Amount for a Gold Loan Calculated

Gold loan, also referred to as loan against gold, is a type of secured loan that a borrower takes from a lender by pledging their gold articles as collateral. Typically, lenders will accept 18, 20, 22 and 24 karat gold as collateral against your loan. A gold loan is a simple and efficient way to meet your long-term and short-term financial requirements. 

Eligibility Criteria for Gold Loan
Here’s are some basic eligibility criteria that you need to meet in order to qualify for a gold loan:

•    You must be an Indian citizen between 21 and 70 years of age.
•    You must be a salaried employee/self-employed individual/ entrepreneur/ farmer/ trader.
You can also use a gold loan interest calculator to determine how much funds you'd be eligible to borrow against your gold ornaments. A gold loan interest calculator is a free tool that will help you simplify your gold loan calculation. 

Factors Affecting Gold Loan Eligibility 
There are a number of factors that affect your gold loan eligibility. Here a some key factors that affect your gold loan eligibility: 
Quality of Gold
The quality of your gold ornaments can affect your gold loan eligibility. Typically, higher quality gold articles increase your chances of getting a gold loan. 
Demographics
Another factor that greatly affects your gold loan eligibility are demographics. Generally, people living in Tier 1 and Tier 2 cities find it relatively easier to get gold loans, compared to people residing in Tier 3 cities. 
Age 
Your age plays an important role in determining gold loan eligibility. Broadly speaking, younger people who are in the peak of their careers find it easier to get a gold loan as compared to older people who are closer to retirement. 
Type of Employment
Salaried individuals, who have a history of consistent and dependable source of income find it easier to get a gold loan. 

How is the Eligible Amount for a Gold Loan Calculated
An important point to note is that the rate of gold per gram is the maximum sum that you can get in exchange for every 1 gram of gold that you pledge. This rate is known as LTV (Loan to Value) and is evaluated based on the current market value of gold. 
Generally, the market value of gold is calculated by taking the average of prevailing 22 karat gold prices for 30 days and is then adjusted down for gold purity, if needed. 
As per RBI guidelines, you can borrow only up to 75% of the total value of your gold ornaments or jewellery. Gold loan per gram eligibility is calculated from several factors, such as the nature of your gold articles, its purity, the weight of the gold and the current market value of gold. 
Oftentimes, it can get difficult to discern how much funds you’re eligible to borrow and what your EMIs might look like, using a gold loan eligibility calculator can help you understand your gold loan eligibility. 

Benefits Of Using Gold Loan Eligibility Calculator
The gold loan eligibility calculator is a simple and effective tool that can be used to calculate your gold loan eligibility efficiently. Here are some of the benefits of using a gold loan eligibility calculator. 

•    Quick and Accurate Estimates
With a gold loan eligibility calculator, you can get accurate estimates of your gold loan eligibility instantly, saving you time and effort. 

•    Simple to Use
The gold loan interest calculator is not only free, but is also extremely easy to use. All you need to do is enter the relevant information and you’ll receive comprehensive estimates for how much funds you may borrow, EMI payments, etc. 

•    Plan your Finances
The gold loan eligibility calculator makes it easy for you to plan your finances better by giving you an idea about how much you’d have to pay as your gold loan EMI. This would give you a better understanding of your finances and your monthly obligations. 

•    Make Effective Comparisons
The gold loan interest calculator makes it easy for you to compare gold loan offerings from various financial institutions. With your estimates in hand, you can make side by side comparisons and choose a financier and gold loan plan that works best for you. 

Conclusion
Gold loans are one of the most accessible types of loans out there. Generally, people between the ages of 21 and 70 years of age who are employed are eligible to avail a gold loan. As per RBI rules, you can borrow only up to 75% of the total value of your gold articles. To understand your gold loan eligibility better, consider using a gold loan eligibility calculator to ascertain your gold loan eligibility.