How Gold Purity and Weight Impact Results in a Gold Loan Calculator

Thinking about pledging gold for a loan? A gold loan calculator can give you a quick estimate—but only if you feed it the right details. The two inputs that move the needle most are purity (karat/fineness) and net weight. Those determine how much pure gold you actually have, which in turn drives the eligible loan amount once the lender’s loan-to-value (LTV) cap is applied.

Purity 101: Karat and Fineness

• 24K ≈ 99.9% pure (often marked as 999)
• 22K ≈ 91.7% pure (often marked as 916)
• 18K = 75% pure (often marked as 750)
• 14K ≈ 58.5% pure (often marked as 585)

Higher karat equals higher pure gold content per gram. Calculators typically convert karat to a purity fraction (e.g., 22K = 22/24 = 0.9167) and multiply that by the item’s weight to estimate the pure gold weight.

Weight: Gross vs. Net

Gross weight is what the whole piece weighs. Net weight is what counts toward the loan—usually the gold only. Stones, beads, enamel, or chunky clasps are excluded during appraisal. If you’re using a calculator, input the weight of the gold component alone for a more accurate estimate.

How Calculators Turn Inputs into a Loan Estimate

Most tools follow a simple sequence:

1. Convert karat to purity fraction (e.g., 18K = 0.75; 22K ≈ 0.9167).
2. Pure gold weight = net weight × purity fraction.
3. Gold value = pure gold weight × market rate per gram.
4. Eligible loan = gold value × lender LTV (often up to a regulated cap).

Some lenders price everything off a standard (commonly a 22K-based rate) and may apply small deductions for impurities or non-gold parts. Treat your calculator output as an estimate, not a final sanction.

Worked Examples

Example A: 22K Chain

• Karat: 22K (purity ≈ 0.9167)
• Net weight: 40 g
• Market rate: 6,000 per gram (illustrative)
• LTV: 75% (illustrative)

Pure gold weight = 40 × 0.9167 ≈ 36.67 g
Gold value ≈ 36.67 × 6,000 = 220,000
Eligible loan ≈ 220,000 × 0.75 = 165,000

Even though the chain weighs 40 g, only about 36.67 g counts as pure gold for the calculation.

Example B: 18K Item

• Karat: 18K (purity = 0.75)
• Net weight: 30 g
• Market rate: 6,000 per gram (illustrative)
• LTV: 75% (illustrative)

Pure gold weight = 30 × 0.75 = 22.5 g
Gold value = 22.5 × 6,000 = 135,000
Eligible loan = 135,000 × 0.75 = 101,250

Lower purity means less pure gold per gram, so the estimated loan drops even at the same gold price.

Same Weight, Different Purity

Take 30 g at the same rate:

• 22K: Pure gold = 30 × 0.9167 ≈ 27.5 g → Value ≈ 165,000 → Loan ≈ 123,750
• 18K: Pure gold = 30 × 0.75 = 22.5 g → Value = 135,000 → Loan = 101,250

That’s a 22,500 difference in the estimated loan purely due to purity.

Why Your Final Offer May Differ

• Rate basis: Some lenders quote per-gram rates aligned to specific purity (often 22K). If you pledge 24K or 18K, internal adjustments may apply.
• Evaluation deductions: Non-gold parts, solder, or excessive wear can reduce net weight during appraisal.
• LTV limits: Policies and local rules can cap the percentage of gold value you can borrow.
• Fees and interest: Processing charges, storage, and interest don’t affect the principal estimate, but they matter for total cost.

Tips to Get Accurate Calculator Results

• Weigh the gold-only portion or use net weight from a reliable appraisal; don’t include stones or charms.
• Use hallmark markings (e.g., 916, 750) or a karat test for the purity input.
• Check the per-gram price assumption used by the calculator and update it if possible.
• Enter a conservative LTV if the tool lets you edit it; not all lenders offer the maximum.
• Run separate calculations for each item if their purities differ; sum the results for a combined estimate.

Quick FAQs

Does higher purity always mean a bigger loan?
Generally yes, because you have more pure gold per gram. But final numbers still depend on the per-gram rate and the lender’s LTV.

What if I don’t know the purity?
Use the hallmark if present, or get a purity test. Guessing can skew your result.

Will the calculator include interest and fees?
Usually no. Most calculators focus on eligible principal. Check the lender’s repayment schedule for the full cost.

Is the calculator result guaranteed?
No. Treat it as an estimate. The sanctioned amount follows a physical appraisal and the lender’s policies.

The Bottom Line

Purity and net weight are the twin levers in every gold loan estimate. Convert karat to a purity fraction, multiply by net weight to find pure gold, then apply the market rate and LTV to gauge your borrowing power. Use careful inputs and realistic assumptions, and your calculator result will be a dependable guide when comparing lender offers.