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This content is for informational purposes only and is not intended to provide financial advice.
When you apply for a gold loan, one of the first questions that comes up is: how much money can I get for each gram of gold? This is referred to as the gold loan value per gram, and it plays a central role in determining your final loan amount.
The gold loan value per gram is not fixed and changes daily based on market gold prices, the purity of your gold, and the lender’s policies. In practice, lenders offer a percentage of the gold’s market value — typically up to 85% — which means the loan amount you receive per gram is lower than the actual market price of gold. With Bajaj Finance, you can get a loan starting from Rs. 5,000 to Rs. 2 crore against 18-22 karat gold jewellery and ornaments or 24 karat gold coins. To accurately estimate your loan details, you can use the online gold loan calculator and make informed financial choices.
Gold loan value per gram today- What it means
The gold loan value per gram is derived from the current market price of gold, adjusted for the purity of the gold and the lender’s loan-to-value (LTV) ratio.
For example:
- If gold is priced at around Rs. 14,500- Rs.15,500 per gram (24K, indicative)
- And the lender offers up to 85% of that value
Then the loan value per gram may fall roughly between:
- 10,500 to Rs. 11,500 per gram, depending on purity and lender terms
This is because lenders do not fund 100% of the gold’s value. Instead, they apply an LTV ratio — typically capped at up to 85% as per regulatory guidelines.
How do lenders calculate gold loan value per gram?
Bajaj Finance calculates gold or silver valuation by taking the lower of either the average closing price of that specific purity over the preceding 30 days or the closing price from the previous day, as published by the India Bullion and Jewellers Association Ltd. (IBJA) or a SEBI-regulated commodity exchange. If price data for the exact purity isn’t directly available, the lender uses the published price for the nearest purity level and proportionately adjusts the collateral’s weight based on its actual purity to determine the final value.
Simple formula for illustration purposes only*
The lender first determines how much loan can be offered for each gram of gold using the following formula:
- Weight of gold pledged: 40 grams
- Purity: 22 Karat
- Gold price: Average closing price over last 30 days for 22 karat: ₹11,300 per gram or previous day’s closing price for 22 karat: ₹11,700 per gram
- Total gold value = 40 gm × Rs. 11,300 (considered lower of average closing price of past 30 days or closing price of that specific purity on the preceding days) = Rs. 4,52,000
- Loan offered: 40 gm× Rs. 9040 (considered as new LTV slab) =Rs. 3,61,600 (priciple + interest amount )as per new LTV slab
- Total interest amount = Rs. 69987 (principle amount RS. 2,91,613 × if considered 24% interest rate / 100)
- Loan amount: Rs. 3,61,600 (principle amount Rs.2,91,613 + interest amount Rs. 69,987)
- LTV Ratio = (Rs. 3,61,600 / Rs. 4,52,000) × 100 = 85%
This means the lender is offering 85% of the gold’s value as a loan, which is a common industry standard. You should also check for the gold price prediction 2026 to plan your loan better.
This is a simplified example for illustration purposes only. Actual loan amounts may vary based on gold valuation and lender policies.
Why gold loan value per gram changes daily
The per gram value is dynamic because it depends on:
- Global gold prices (affected by inflation, currency, and demand)
- Domestic factors like import duty and currency rates
- Market volatility, which lenders smooth out using average pricing
Even a small change in gold prices can significantly impact how much loan you receive.
Understanding future gold trends can help you time your loan better. Gold has historically been considered a stable asset, and its value tends to rise during economic uncertainty. Many forecasts suggest that gold prices may remain strong going forward, influenced by global demand, inflation trends, and central bank policies.
Key takeaways
- The gold loan value per gram is not a fixed number, it is calculated based on the current gold price, purity of your gold, and the lender’s LTV ratio.
- Most lenders offer up to 85% of the gold’s value, which means the loan amount per gram will always be lower than the market price.
- Since gold prices fluctuate daily, the loan value per gram also changes, making it important to check current rates before applying.
- For borrowers, understanding how this calculation works helps in estimating the loan amount more accurately and making informed financial decisions.
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