When you have to fulfill some financial responsibility on a special occasion or in an emergency and you do not have sufficient funds, then gold loan can become a very useful tool at such a time. The thing to note is that the amount of gold loan you will get depends largely on the purity of the gold. The higher the purity, the higher the amount of loan you can take, if the purity is less then the loan amount will also reduce. Let us understand the impact of purity of gold in gold loan.
Meaning of purity of gold
The purity of gold is measured in carats. It is represented by K. 24K gold is the purest, containing 99.9% gold. The higher the purity of gold, the softer or more delicate the gold jewelery made from it will be. This is why other metals are mixed with gold to improve its strength and durability.
24 karat (24K): 99.9% pure gold, rarely used in jewellery.
22 karat (22K): 91.6% pure gold, used in high-quality jewellery.
18 karat (18K): 75% pure gold, often used in jewelery with intricate designs.
14 karat (14K): 58.3% pure gold, used in less expensive jewellery.
Gold Loan and purity of gold
Keep this in mind while applying
To get the best gold loan, you have to make some efforts. According to ICICI Direct, to maximize your loan amount, pledge against high quality gold (22K or 24K) if possible. Be aware of the assay process used by the institution that is offering the gold loan and how it affects the valuation of your gold. Comparing multiple lenders can help you get the best deal.
Image Credit: India-Tv.