Can diamond jewellery be used to avail of a gold loan?

  • By Ruptok
  • January 27th, 2022

The majority of lenders do not lend on diamond jewellery, although some do lend on 18 karat gold and diamond jewellery. You will be given a loan amount based on the amount of gold in your possession, not on the value of diamonds. Loans against diamond jewellery are available from some private jewellers. The interest rate, however, will be rather high. Only the value of the gold component is considered in the case of gold jewellery set with precious stones.

Individuals can acquire a big loan amount without having to sell their gold ornaments by pledging the appropriate gold ornaments. One can get the most funds for dealing with financial problems by pledging gold ornaments of the greatest purity, i.e. 22 karats. When considering a gold loan,diamond is not the best option.

What is a Gold Loan, precisely?

A secured credit option, a loan against gold ornaments or jewellery loan, is available to borrowers who pledge gold jewellery ranging from 18K to 24K as collateral. The approved loan amount is a proportion of the current market value of the pledged gold.

This form of secured loan is one of the simplest and fastest ways to get money in an emergency. Because of the rising popularity of this type of credit, several lenders are now offering gold loans with low interest rates. Additionally, while you're at it, learn about gold loan renewal procedures.

What type of jewellery can I use to get a gold loan?

Any gold valuables can be used as collateral for a loan. The loan value is determined by the purity of the gold, not daimond or any other stones. Coins and gold bars, for example, have a higher worth due to their higher purity. Only the value of the gold component is considered in the case of gold jewellery set with precious stones.Due to RBI limitations, NBCS does not provide gold loans on gold coins.

What is the best way to figure out the maximum value of a gold loan?

Over the years, India's annual gold demand has skyrocketed, and this trend does not appear to be slowing down anytime soon.

When determining the sanctioned loan amount in lieu of gold jewellery, a number of criteria are taken into account. Lenders calculate the current market value of pledged gold depending on its weight and purity.

  • Gold purity
  • The quality of gold jewellery used as collateral has a major impact on the loan amount issued. Gold jewellery is graded in karats (K), which range from 18K to 22K. 22K gold is resistant to harm because it contains alloys such as copper, cadmium, zinc, and silver.

  • Loan-to-value (LTV) ratio
  • A loan-to-value ratio is essentially a risk assessment undertaken by lenders before approving any secured loan. It is the amount of money a financial institution can lend to a borrower as a percentage of the value of the collateralized asset. Because the LTV ratio for gold loans is regulated at 75% by the RBI, a lending institution can only provide Rs.75 for a total of Rs.100 in collateral.

  • Monetary value of gold
  • The weight of the gold is an important factor that lenders evaluate when approving a loan. The purity and weight of the gold will be the only determining elements in the case of precious stone studded gold jewellery. The price of precious jewels will not be considered.

  • Form of Gold
  • The repayment is quicker since ornaments have sentimental worth. When pledging gold for finances, keep in mind that gold bars and bullion are not accepted as collateral by lenders.

  • Jewellery with studs
  • As previously stated, the loan amount is determined only by the weight and purity of gold. When weighing the decoration,diamonds, precious stones, or gems embedded in it are not taken into account. If any are present, they are eliminated before the final measurement is taken.


You can't receive a gold loan with diamond jewellery, you can only get a gold loan with gold jewellery as collateral. The lender will only pay you for the gold and not for any stones in the jewellery. By promising the proper gold ornaments, you can obtain a large loan amount without having to sell their gold ornaments. Pledge gold jewellery of the highest purity, i.e. 22 karats, to acquire the maximum funds for dealing with financial troubles.