Gold Loan
What your jewellery can raise under the RBI's 75% loan-to-value cap, adjusted for purity — and what the loan costs under bullet repayment vs monthly interest vs EMI.
Loan against gold RBI 75% LTV cap
§1How the number is built
The valuer weighs your jewellery, deducts stones and clasps, tests purity, and applies the lender's board-approved rate (a trailing average of market price, so a touch below today's rate). The LTV cap then decides the loan.
§2Repayment styles — where the real cost hides
The table above prices your inputs under all three. NBFC branch staff usually default you into bullet schemes — compare before nodding.
§3The gotchas
If gold falls and your outstanding (with accrued interest) breaches the LTV cap, the lender can demand top-up money or extra gold within days — and auction the pledge if you don't. Bullet schemes hit this fastest because interest keeps stacking onto the outstanding.
Advertised “₹X per gram” rates quote 24K. Your 22K jewellery gets ~91.6% of that, 18K gets 75% — before stone deductions. The per-gram figure above is the honest one.
Gold loans run 6–12 months. Miss the renewal and penal interest accrues; NBFCs auction pledged gold after notice. Calendar the maturity date — the sentimental value isn't in the LTV.
Income-tax rules cap cash disbursal at ₹20,000; the rest comes by transfer. Any lender offering large cash amounts is cutting corners you don't want to be near.
§4Who lends, at what
Banks — SBI, Canara, Federal, HDFC Bank, ICICI, IndusInd — typically price gold loans at 9–12% with slower, branch-style processing. Gold-loan NBFCs — Muthoot Finance, Manappuram, IIFL — disburse in under an hour but charge 12–24%, with the bullet schemes at the top of that range. If your need can wait a day, a bank saves real money; if you're rolling over an existing NBFC loan, a bank balance-transfer of a gold loan is routine and worth asking for.
§5Related
Need working capital instead of a lump sum? Compare with an overdraft or a term loan.