What you need to know
Loan-to-value (LTV) is the loan as a share of the value of gold pledged. RBI’s 2025 Directions, in force by 1 April 2026, set tiered caps for consumption gold loans and a uniform valuation method for all lenders.
LTV caps
| Loan amount | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| Above ₹2.5 lakh up to ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
- For bullet loans, LTV is calculated on the total amount repayable at maturity (principal + interest).
- Gold is valued at its actual purity using the lower of the 30-day average closing price and the previous day’s closing price (IBJA or a SEBI-regulated exchange).
- Per-borrower limits: gold ornaments 1 kg, gold coins 50 g.
- Applies to all banks, NBFCs and HFCs under RBI’s Lending Against Gold and Silver Collateral Directions, 2025 (in force by 1 April 2026).
Worked example
| Case | Result |
|---|---|
| Gold value ₹2,50,000 | Max loan at 85% = ₹2,12,500 (below ₹2.5 lakh) |
| Gold value ₹5,00,000 | 85% would be ₹4.25 lakh → falls in 80% slab → ₹4,00,000 |
| Bullet loan ₹2 lakh at 10% for 12 months | Repayable ₹2,20,000 → gold needed ≥ ₹2,58,824 at 85% |
LTV calculator
Frequently asked questions
Why did my LTV fall even though I borrowed less?
For bullet loans LTV includes the interest that will accrue, and a rise in the loan slab lowers the cap.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.