Gold loan companies in Kerala have grown rapidly, offering families a quick way to access cash without selling their jewelry. But the appraisal process for a gold loan is very different from selling gold. If you understand how gold loan appraisal works, you can make smarter choices and avoid hidden costs.
Gold Loan Appraisal vs. Selling Gold
When you visit gold loan companies in Kerala, their main goal is to value your ornaments as collateral:
- Purity Check: Most lenders test purity with XRF machines. A 22K chain fetches more than an 18K one.
- Net Weight: Only the gold weight counts. Stones and enamel are excluded.
- Loan-to-Value (LTV): RBI allows a maximum of 75% of market value. For example, 20 grams of 22K gold can get you a loan equal to 75% of its value.
When you sell gold, jewelers focus on resale:
- You are paid based on live gold rates.
- Making charges may reduce the payout by 2–5%.
- Stones and gems may carry value—ignored in gold loans.
👉 The key is: Gold loan companies in Kerala value ornaments as collateral, while jewelers value them for resale.
What You Should Watch Out For
- Compare interest rates. Some firms charge 7%, others over 24%.
- Always check if weighing is done in front of you.
- Ask about foreclosure fees before pledging.
- Confirm how interest is calculated.
Case Study: Kerala’s Gold Loan Market
According to the RBI 2023 report, Kerala accounts for nearly 20% of India’s gold loan market. Muthoot Finance and Manappuram Finance are the largest players. This shows how strongly families in Kerala depend on pledged gold for financial security.
“Research shows that Kerala households hold over 400 grams of gold per capita—more than twice the national average.”
FAQ
Q1. Do gold loan companies in Kerala pay less than jewelers?
No, they don’t buy gold. They only lend against it, at 75% of its value.
Q2. Is pledged gold safe?
Yes, RBI-regulated firms insure pledged gold. If stolen, compensation is provided.
Q3. Should I pledge or sell my ornaments?
Pledge if you need short-term funds. Sell if you want full value and no repayment.
Learn about hallmarking in our guide: Understanding BIS Hallmark: What It Means for Your Jewellery
Read more on purity differences: 24K, 22K, 18K: What Every Malayali Gold Buyer Must Know
Before pledging, check our Gold Buying Checklist for Malayalis
Suggested Reading:
Reserve Bank of India – Guidelines on Gold Loans
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