How much can you borrow against your gold? LTV, RBI tiers and the rate

It usually starts with a number you need by a date you can't move. School fees. A medical bill. A supplier who wants paying on Friday. And in a locker somewhere sits the one asset every Indian household quietly counts on — gold. So you weigh it in your hand, picture the 50 grams of bangles your mother gave you, and wonder: what will the bank actually hand over for this?

The answer is more precise than most people expect, and it turns on two letters you'll see on every gold-loan page: LTV. Understand that, and you'll know your loan before you ever reach the counter — and you won't be talked into a worse deal.

What the bank actually values

Here's the first surprise. When you pledge a piece of jewellery, the lender doesn't care what you paid for it. It doesn't care about the design, the stones, or the making charges you grumbled about at the time. It values one thing: the gold metal — its weight and its purity.

So a delicate, heavily stone-set necklace that cost you a fortune at retail may be worth surprisingly little as collateral, because much of that price was gemstones and craftsmanship the bank simply ignores. A plain, heavy 22K chain, on the other hand, is almost pure collateral. The lender weighs the gold, checks its purity (usually 22K for jewellery), multiplies by the day's rate — and that metal value is the only number that matters.

LTV: the ceiling on what you can borrow

The single number that decides your loan

Once the lender knows your gold is worth, say, ₹1,00,000, it won't lend you the whole amount. It keeps a cushion — because gold prices move, and if they fall, the lender still needs your loan to be safely covered. That cushion is set by the loan-to-value ratio, capped by the RBI.

But 75% isn't the only number. The RBI lets lenders offer higher LTV on smaller loans, on a sliding scale — so a modest loan can stretch closer to 85% of your gold's value, while large loans sit at the stricter 75% ceiling:

A worked example: 50g of family gold

Let's put real numbers on it. Say you pledge 50g of 22K jewellery. At today's 22K rate of ₹13,230/g (30 Jul 2026), the gold metal is worth about:

• Gold value: 50g × ₹13,230 ≈ ₹6,61,500
• At 75% LTV: a loan of about ₹4,96,125
• At 85% (smaller-loan tier): up to about ₹5,62,275

That's your headroom before you even talk to a lender. Anyone offering far less is valuing your gold low; anyone offering far more is probably an NBFC charging for the privilege. Compare live gold-loan rates across banks.

What actually drives your interest rate

Two borrowers with identical gold can be offered very different rates. Here's what moves the needle:

• Bank vs NBFC. Banks (SBI, Indian Bank, CUB and the like) price lower; gold-loan NBFCs lend faster and at higher LTV but charge more for the speed.
• Loan size and LTV. Pushing for maximum LTV often nudges the rate up — the lender is taking more risk.
• Repayment scheme. A bullet loan (pay it all at the end) usually carries a different rate than regular EMIs; some "teaser" rates apply only if you pay interest monthly.
• Tenure. Short tenures and prompt servicing earn the best rates; longer or irregular repayment costs more.

Bank or NBFC — the honest trade-off

It comes down to what you're optimising for. If you have a day or two and want the lowest cost, a bank is almost always cheaper. If you need cash in the next hour and your gold is ornate, an NBFC will move faster and lend a higher share — you just pay for it in the rate. Neither is wrong; they're built for different emergencies.

Gold loans are one of the cheapest ways to raise money in India precisely because your gold is such good collateral. Walk in knowing your gold's weight, its purity, today's rate and your LTV, and you turn a stressful counter conversation into a simple, confident transaction.