What Jewellery Can You Pledge for a Gold Loan? A Purity Guide
“Will they take my mangalsutra? Can I pledge a broken chain? What about my grandmother’s temple jewellery?” — questions our appraisers answer daily. The good news: almost any gold you own can be pledged. The useful news: what you pledge and how it is valued determines how much cash you walk out with.
What gold can be pledged
- 22k and 18k jewellery — chains, bangles, rings, earrings, pendants, mangalsutra, kadas, nose pins;
- BIS-hallmarked ornaments — the safest to pledge; hallmarking guarantees purity;
- Gold coins and biscuits — minted coins (e.g. 999 purity) are accepted broadly;
- Temple jewellery — usually 22k or 18k; accepted once tested;
- Badly damaged or broken ornaments — the gold still has exactly the same value, only the making charge is irrelevant;
- Modern lightweight (artificial diamond-studded) jewellery — the gold portion is valued; stones are not.
What is NOT accepted
- Gold-plated or gold-filled items — the gold content is negligible;
- 24k raw gold in unusual forms — bars are fine, but scrap of unverifiable source may be refused under KYC norms;
- Jewellery with embedded non-gold material (large solitaires, heavy enamel) if removing it damages the piece — policy varies, so ask;
- Other people’s gold — you must own the gold, or bring the co-owner along.
How purity is tested (and why it matters)
Value starts with purity. Lenders test gold in three ways:
- Acid testing — a small scratch is treated with acid of known strength; the reaction reveals karat (carat) range;
- XRF (X-ray fluorescence) — a non-destructive scan that reads the exact metal composition;
- BIS hallmark check — the hallmark logo confirms certified purity for the weight band printed on the piece.
Whatever the method, the appraisal happens in front of you. A fair lender shows you the scale reading, the test result and the price formula before you sign a single form.
How valuation maths works
The classic formula:
Gross weight − jewellery allowance × purity factor × current gold rate = collateral value
- Jewellery allowance: stones, threads and stems are excluded or adjusted — this is standard industry practice, but the deduction differs from lender to lender, so compare;
- Purity factor: 22k means 91.6% pure; 18k means 75% pure;
- Current gold rate: the daily reference price for 24k gold, adjusted for purity.
Finally, the LTV cap of 75% decides the loan amount on top of that value. The entire journey — from weight to loan amount — is explained with an example in our LTV guide.
Practical tips before you pledge
- Sort your gold before visiting: separate 22k from 18k and remove stones you are willing to lose; the appraiser values each piece faster and more transparently.
- Carry Hallmark certificates if you have them — they speed up valuation.
- Ask what the stone allowance is at the branch before pledging stone-heavy pieces.
- Do not include heirlooms you cannot bear to part with even temporarily — the emotional cost isn’t worth an extra ₹5,000 in loan.
- Consider pledging newer, sturdier pieces and keeping fragile heirlooms at home.
The bottom line
Nearly all the gold in your jewellery box is pledgeable — what varies is how much value you get for it. Choose a lender that tests transparently, applies fair allowances and updates your collateral value on renewal. That is the standard we hold ourselves to at MAG Finserv — come test us with your most confusing ornament.