How gold loans are actually valued (and why two lenders quote you differently)

A gold loan amount comes down to three numbers: the purity of your gold, its weight, and the loan-to-value (LTV) ratio the lender applies. The RBI caps LTV at 75% of the gold's value for most lenders, meaning you can typically borrow up to three-quarters of what your gold is worth — never the full amount.

Purity is usually assessed in karats; 22K and 24K jewellery values higher than 18K per gram, and lenders will typically deduct the weight of stones or other non-gold material before valuing it. This is why two lenders can quote different amounts on the same necklace: their in-house valuation methods, and the gold rate they reference on a given day, can differ slightly.

Weight is measured after removing stones and other embellishments — only the gold itself counts. If your jewellery is heavily set with stones, ask the lender for a weight breakdown before agreeing to a valuation you don't understand.

Because gold loans are secured, they tend to have both faster disbursal (often same-day) and lower interest rates than unsecured personal loans, which is why they're worth comparing even if a personal loan was your first instinct.