Gold Loan LTV & Valuation Rules
- Loan-to-Value (LTV) Ratio: The Reserve Bank of India (RBI) mandates that banks and NBFCs cannot lend more than 75% of the total value of the pledged gold. If your gold is worth ₹1 Lakh, the absolute maximum loan you can get is ₹75,000.
- Net Weight: The appraiser will subtract the weight of any stones, pearls, or enamel on your jewelry. The loan is disbursed purely on the net weight of the gold.
- Purity Deduction: Most jewelry in India is 22K. The bank will calculate the value using the 22K rate. If your gold is 18K, the valuation and your maximum loan amount will drop significantly.