Gold loans can act as a flexible funding option for many people. They can leverage their personal gold assets to secure a loan efficiently and rapidly. To maximise the value of this financial product, it’s vital to understand how the gold loan per gram is calculated as well as the variables that can influence the rates.
At DBS Bank, applying for a gold loan becomes a straightforward process, offering competitive interest rates, clear terms and comprehensive support to guide you at every step.
At the core of a gold loan calculation is the valuation of the gold you use as collateral. This involves several key steps that determine how much you can borrow:
Assessing Gold Purity
The first step is to evaluate the purity of your gold, which is measured in karats. Gold can be 18k, 22k or 24k, and price of gold is calculated based on its purity. Understanding the level of purity of your gold is key since the purer the gold, the more money you’re going to be able to get on the loan.
Determining the Gold’s Market Value
A lender examines the purity of the gold and then assesses its latest market value. The current market price for the gold is calculated after the gold's gram weight is finally measured and valued in its entirety.
Applying the Loan-to-Value (LTV) Ratio
The loan to value ratio is a fairly important aspect in getting an idea of how much money you can afford to borrow against your gold. Most reputed and reliable lenders including DBS Bank offer a specific percentage of the evaluated value, often up to 75%depending on the bank’s policies and regulatory guidelines. For example, if your gold's value is ₹1,00,000 and the bank’s LTV ratio is 75%, you may receive a loan of ₹75,000.
You can use a gold loan calculator to simplify such calculations. Offered on the websites of many established financial institutions, such as DBS Bank, you can simply key in the weight and purity(carat) of your gold, and the current selling price, and find out how substantial of a loan you might be eligible for. It is a helpful way of understanding your current position and makes it far easier to make an effective financial plan.
Various factors play a significant role in determining the gold loan per gram rate:
While there are many advantages of gold loan, several considerations should be kept in mind before applying for a gold loan.
DBS Bank gives a focused approach for their customers to get gold loans.
Knowing how gold loan per gram is calculated gives you the knowledge you need to improve your borrowing strategy. With comprehensive solutions and customer-oriented service by DBS Bank, applying for a gold loan becomes a straightforward, providing you with expert supervision and competitive interest rates.