How Gold Loan Valuation Works: Capri Loans' Complete Process Explained

Gold loan valuation is the process lenders use to determine your gold's worth and decide your loan amount. At Capri Loans, gold is valued using the 30-day average IBJA rate for 22-carat gold, based on its net weight and purity (18–22 carat). You can get up to 85% of this assessed value as a loan.

Introduction

When you walk into a branch with your gold jewellery, the value you're offered isn't a guess — it follows a defined process involving purity checks, weight measurement, and a market-rate benchmark. Understanding how gold loan valuation works helps you know exactly what to expect, and ensures you're getting a fair, transparent assessment of your gold.

This guide breaks down each step of Capri Loans' gold valuation process — from the tests conducted to how the final loan amount is calculated.

Why Gold Valuation Matters

Your loan amount depends entirely on how your gold is valued. Two pieces of jewellery with the same weight but different purity — say 18K versus 22K — will receive different loan amounts. Similarly, a piece with embedded stones or gems will be valued based only on its gold content, not its total weight. Knowing this helps you understand your loan offer and avoid surprises.

Step 1: Weight Test

The Weight Test is the first and most important step. A certified Gold Valuer weighs your jewellery using calibrated, standardized scales.

The net gold weight — the figure used for valuation — is calculated by subtracting the weight of:

• Stones, diamonds, and gems

• Lac and alloy

• Strings, threads, and fastenings

• Any other non-gold inclusions

Only the pure gold component counts toward your loan amount.

Step 2: Purity Assessment — Colour/Rub Stone, Acid & Salt Test

This mandatory test determines your gold's carat purity. The Gold Valuer gently rubs the ornament on a soft stone to observe colour variations, which indicate purity levels such as 18K, 20K, or 22K. Acid and salt tests may be used for additional confirmation.

Capri Loans accepts gold jewellery between 18 and 22 carats. Gold below 18 carat or 24 carat (pure gold) is not accepted as collateral. If your jewellery is below 22 carat, its value is proportionately converted to the 22K equivalent.

Step 3: Optional Verification Tests

If there's any uncertainty after the mandatory tests, the Gold Valuer may conduct additional checks:

• Flex Test: Re-verifies quality and flexibility to confirm purity

• Smell Test: Detects fumes that indicate lower purity (18–20 carats) or adulteration

• Sound Test: The gold is tapped on a glass table — a clear ringing sound confirms purity

• Usability Test: Checks finishing quality and inspects for joints or patches, tested with acid if detected

These tests add an extra layer of accuracy, especially for older or intricately designed jewellery.

Step 4: Applying the IBJA Rate

Once the net weight and purity are confirmed, your gold's value is calculated using the 30-day average closing price of 22-carat gold as quoted by the Indian Bullion & Jewellery Association (IBJA).

This benchmark ensures your gold is valued against a recognized, market-linked standard rather than an arbitrary in-branch rate.

Step 5: Calculating Your Loan Amount

With the gold value established, Capri Loans offers up to 85% of that value as your loan amount.

Example:

• Net gold weight: 20 grams (22 carat)

• 30-day IBJA average rate: ₹6,000/gram

• Gold value: ₹1,20,000

• Maximum loan (85% LTV): ₹1,02,000

If your gold is 18 carat instead of 22 carat, the value is proportionately adjusted (18/22 of the 22K rate) before applying the LTV.

Transparency and Safety During Valuation

The entire valuation process at Capri Loans is conducted under CCTV surveillance, and you can watch as your gold is tested and weighed. Once pledged, your jewellery is kept in secure custody as per Capri Loans’ branch process during the loan tenure.

What to Check During Your Gold's Valuation

• Confirm the net weight being considered (after excluding stones and attachments)

• Ask which purity your jewellery has been assessed at

• Check that the IBJA rate used reflects the 30-day average

• Make sure the valuation is conducted in your presence, under CCTV

Common Misunderstandings About Gold Valuation

• "My 24K gold coin will get me a higher loan" — Capri Loans accepts only 18–22 carat jewellery and ornaments; 24K gold and coins/bars are not accepted as collateral

• "The stones in my jewellery add to the loan value" — only the net gold weight counts; stones, gems, and other attachments are excluded

• "Valuation charges apply" — Capri Loans does not charge separate valuation or appraisal fees

Conclusion

Gold loan valuation at Capri Loans follows a clear, multi-step process — purity testing, net weight measurement, and IBJA rate benchmarking — all conducted transparently under CCTV. Knowing how this works means you can walk into a branch with realistic expectations and confidence in the offer you receive.

Visit your nearest Capri Loans branch to get your gold valued, or use the gold loan calculator to estimate your eligible amount beforehand.