How Much Gold Loan Can You Sanction Per Gram? A Simple LTV Guide
How Much Gold Loan Can You Sanction Per Gram? A Simple LTV Guide for New Pawnbrokers
One of the first questions a new pawnbroker may have is: “How much gold loan can I give for one gram of gold?” The answer depends on more than just the weight of the gold. Gold purity, valuation, applicable LTV rules, and your lending policy can all affect the final loan amount.
Start With the Gold Value
A gold loan is not calculated only by multiplying the weight of gold by the current gold rate. The purity and eligible gold content also need to be considered.
For example, if the eligible value of the gold is ₹1,00,000 and an applicable LTV limit is 75%, the maximum loan amount would be:
₹1,00,000 × 75% = ₹75,000
The actual amount may vary depending on applicable regulations, lender policy, valuation, and gold purity.
A Simple Per-Gram Example
Suppose a pawnbroker values eligible gold at ₹6,000 per gram. For 10 grams of eligible gold:
- Gold weight: 10 grams
- Value per gram: ₹6,000
- Total eligible value: ₹60,000
- At 75% LTV: ₹45,000
This is only a simple example. The actual loan amount depends on the applicable rules, purity, valuation method, and lending policy.
Why Gold Purity Matters
Two pieces of gold with the same weight may not have the same eligible value if their purity is different.
For example, 22K gold and 18K gold contain different amounts of pure gold. Therefore, a pawnbroker should consider the applicable purity and valuation method before calculating the loan amount.
How Gold Loan Software Can Help Pawnbrokers
Calculating and recording gold loan details manually can become difficult when the number of customers and loan accounts increases. Gold loan software can help keep important information organized.
With CK Tech Solutions FinApp, pawn businesses can manage important loan information such as:
Customer Details
Maintain customer information along with loan records.
Gold & Collateral Details
Record gold weight, purity, and collateral information.
Loan Information
Maintain loan amount, interest, due dates, and related details.
Payment History
Keep payment and loan transaction information organized.
Whether you operate a small pawn business in Chennai, Trichy, Tirunelveli, Madurai, Coimbatore, Salem, Erode, Tiruppur, or Chengalpattu, maintaining accurate gold valuation and loan records can make daily operations easier.
Frequently Asked Questions
The Simple Rule to Remember
For a gold loan, do not look at weight alone. A simple way to understand the process is:
For growing pawn businesses, keeping these details organized can reduce manual work and make loan records easier to manage. CK Tech Solutions FinApp provides a structured system for managing customer, collateral, loan, interest, payment, and related records.
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