Understand how eligible gold weight, purity, and LTV can affect how much you can borrow.

If you are considering a loan against gold, the amount you can borrow depends on more than the total weight of your jewellery. Eligible net gold weight, purity, the applicable gold value and the LTV limit all affect the estimate. A gold loan calculator can show how these inputs affect your potential borrowing amount.

For jewellery, valuation is based on eligible gold content rather than gross weight. Stones, gems and other non-gold components are excluded. Two pieces with the same gross weight can therefore have different eligible values.

How do weight and purity affect the loan amount?

Weight and purity determine the value of gold eligible for a loan against gold. Weight indicates how much eligible gold you have, while purity shows how much actual gold each gram contains.

If two gold items have the same net weight, the higher-purity item will generally have a higher value. If purity remains the same, increasing the eligible weight generally increases the assessed value.

How is the loan amount calculated?

A simple way to understand the calculation is:

Estimated loan amount = eligible net gold weight × applicable gold value per gram × applicable LTV

Bajaj Finance considers the lower of the previous day's closing price or the 30-day average closing price for the relevant purity, as published by IBJA or a SEBI-regulated commodity exchange.

For example, if jewellery has a gross weight of 20 grams but contains stones or other non-gold parts, the full 20 grams may not be counted. Valuation uses the eligible net gold weight.

This calculation provides an estimate. The lender determines the final amount after completing its valuation and eligibility assessment.

How much can purity change the estimated loan amount?

To isolate purity, keep the weight, value assumptions and LTV constant. The figures below are illustrative and do not represent current gold rates.

The comparison shows how purity can affect the estimated amount when the other assumptions remain unchanged. That is why checking the actual purity of your gold matters before estimating its value.

In practice, the applicable LTV depends on the loan amount and product terms.

Bajaj Finance accepts jewellery and ornaments of 18K–22K purity. Bajaj Finance also accept eligible gold coins up to 24K, subject to applicable criteria.

How much can weight change the estimated loan amount?

Now keep purity, value per gram and LTV constant and change only the eligible weight.

When the other inputs stay the same, doubling the eligible weight doubles the assessed gold value and estimated amount.

However, the final amount may not increase at exactly the same rate because the applicable LTV can vary with the loan amount.

Why can the final amount differ from your calculation?

The estimate you see online is useful for planning, but it is not a final sanction. The result can differ because:

• The verified net gold weight may differ from the gross weight.
• The lender verifies purity during valuation.
• The applicable gold value may change.
• The LTV applicable to the loan amount may affect the final amount.
• The lender's eligibility assessment also applies.

For consumption loans, Bajaj Finance currently states maximum LTV levels of up to 85% for loans up to Rs. 2.5 lakh, 80% for loans above Rs. 2.5 lakh and up to Rs. 5 lakh, and 75% for loans above Rs. 5 lakh, subject to the applicable product and regulatory framework.

Therefore, you should not apply one fixed LTV percentage to every loan amount.

How to use a gold loan calculator

A gold loan calculator helps you estimate your potential borrowing amount based on your gold details. Follow these steps to understand the estimate.

Step 1: Enter your gold details

Enter the eligible gold weight and select the purity for a more accurate estimate.

Step 2: Check the applicable gold value

Review the gold value the calculator uses based on the selected purity and applicable valuation.

Step 3: Review the estimated amount

Check the amount you may be able to borrow against your eligible gold based on the details you enter.

Step 4: Compare different scenarios

Change the weight or purity to understand how different gold details can affect your estimated borrowing amount.

Step 5: Plan your borrowing

Use the estimate to decide how much you may need to borrow before proceeding with your application.

Use the result for planning, but keep in mind that the final amount depends on valuation, applicable LTV, and eligibility criteria.

What should you check before applying?

Before pledging your gold, check:

• Net gold weight: Separate the eligible gold content from stones and other non-gold parts.
• Purity: Confirm the karat of the gold you plan to pledge.
• Valuation method: Understand how the lender determines the applicable gold value.
• LTV: Check the limit applicable to your expected loan amount.
• Borrowing need: Consider how much you actually need rather than automatically borrowing the maximum.

A calculator is most useful when you enter realistic details and treat the result as an estimate. It can support your planning, but it does not replace the lender's final valuation.

Weight and purity affect eligible gold value in different ways. Weight changes the quantity of eligible gold, while purity changes the gold content represented by each gram. The applicable gold value and LTV then determine how that assessed value translates into a potential loan amount.

If you are considering a loan against gold, use eligible net weight and actual purity rather than gross jewellery weight. A gold loan calculator can help you compare scenarios before you apply, while the lender's final valuation determines the amount you can receive. Your loan against gold estimate should therefore be treated as a planning figure.

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