A gold loan lets you borrow against gold jewellery quickly, often within hours. RBI's gold-loan directions (effective 1 April 2026) set clearer loan-to-value limits, valuation and borrower protections.
Key takeaways
- LTV limits: 85% up to ₹2.5 lakh, 80% for ₹2.5–5 lakh, 75% above ₹5 lakh of loan amount.
- Only jewellery and specified bank-sold coins are accepted — not bars.
- Repayment options include EMI, interest-only with bullet principal, or bullet repayment.
- Gold must be returned within 7 working days of full repayment.
How the loan amount is calculated
Loan = net gold weight × purity rate × LTV. Stones and non-gold parts are deducted.
Example: 20 g of 22K at ₹14,095/g = ₹2,81,900 value. At 85% LTV (loan ≤ ₹2.5 lakh), the maximum loan is about ₹2.39 lakh.
Repayment options
| Option | How it works | Best for |
|---|---|---|
| EMI | Principal + interest monthly | Regular income |
| Interest-only, principal at end | Pay interest monthly, principal at maturity | Short-term needs |
| Bullet | Pay all at maturity (typically ≤ 12 months) | Very short-term needs |
Costs to check
- Interest rate (often 9%–20%+ depending on lender)
- Processing and valuation fees
- Penal charges for delay
- Auction terms if you default
Protections for borrowers
- Valuation in your presence with a clear statement
- Return of gold within 7 working days of closure, with compensation for delay
- Auction reserve price at least 90% of market value; surplus refunded
Check today's gold rate and use the gold loan calculator.
Your action checklist
- Check your credit report and fix errors at least a month before applying.
- Get the Key Fact Statement (KFS) with APR from at least two lenders.
- Keep total EMIs within about 40–50% of take-home pay.
- Read prepayment, foreclosure and penal-charge clauses before signing.
- Save the sanction letter, KFS and repayment schedule; collect the no-dues certificate when you close.
FAQs
Does a gold loan need a credit score?
It is secured, so approval is easier, but lenders may check your report and payment history is reported.
Can I take a loan against silver?
Yes — from 1 April 2026 lenders can accept silver jewellery and coins within limits. See loan against silver.
