How to Buy 200g Gold with Rs. 10 Lakh Using a Bank Loan

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Synopsis: With Rs. 10 lakh in hand, you can still purchase 200g gold worth Rs. 23 lakh using a gold loan.
By pledging jewellery with the bank and repaying in 2–3 years, you can secure ornaments today and benefit from long-term price growth.

Introduction: Gold has always been a trusted investment in Indian households, especially for marriage planning.
Here’s a step-by-step breakdown of how you can buy 200 grams of gold worth Rs. 23 lakh with only Rs. 10 lakh using a gold loan.

1. Step 1: Place Order with Jeweller
   At today’s market price of Rs. 11,500 per gram, 200g gold costs Rs. 23 lakh.
   You pay Rs. 10 lakh advance to the jeweller.
2. Step 2: Pledge Gold with Bank
   Once ready, the jewellery is pledged with a bank.
   As per RBI guidelines, banks value gold lower — approx Rs. 7,800 per gram.
   At 85% Loan-to-Value (LTV), the bank lends:

   Particulars	Calculation	Value
   Bank Valuation	200g × Rs. 7,800	Rs. 15,60,000
   Loan (85% LTV)	Rs. 15,60,000 × 85%	Rs. 13,26,000

   The jeweller receives full payment, and you own the gold — though pledged until loan repayment.

3. Step 3: Repayment Strategy (2–3 Years)
   Gold loans carry 8–12% annual interest. Clearing them in 2–3 years keeps costs under control.

   Period	Interest Cost	Total Repayment
   2 Years @ 10%	Rs. 2,65,200	Rs. 15,91,200
   3 Years @ 10%	Rs. 3,97,800	Rs. 17,23,800

4. Step 4: Gold Value After 10 Years
   By marriage time (10 years later), gold may double or triple. Assuming steady growth:

   Growth Rate	Future Price/Gram	200g Value
   6% CAGR	Rs. 20,600	Rs. 41.2 lakh
   8% CAGR	Rs. 24,800	Rs. 49.6 lakh
   10% CAGR	Rs. 29,800	Rs. 59.6 lakh

Key Advantages:

• Buy 200g gold today with only Rs. 10 lakh.
• Bank loan bridges the shortfall at reasonable interest.
• Repay in 2–3 years to minimize interest burden.
• Secure ornaments now, avoiding future price hikes.

Risks to Consider:

• Banks value gold lower than market rates.
• Delays in repayment increase total interest cost.
• Pledged ornaments cannot be used until loan closure.

Final Note: This method works best if you can repay the loan in 2–3 years.
Once cleared, the jewellery is yours for long-term use. With gold prices expected to rise, this strategy helps you lock in today’s rates while planning ahead for marriage expenses.