Gold loan LTV calculator (India, 2026 rules)

What changed for 2026

The Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025 were issued on 6 June 2025 and have to be complied with no later than 1 April 2026. They replace a patchwork of bank and NBFC rules with one framework, and four of their provisions decide how much anyone can actually borrow.

• Tiered loan to value. Paragraph 19 caps the LTV on consumption loans against gold or silver at 85% for loans up to ₹2.5 lakh, 80% for loans above ₹2.5 lakh and up to ₹5 lakh, and 75% for loans above ₹5 lakh. The tier follows the size of the loan, not the size of the pledge, so a borrower who wants ₹2.6 lakh is tested at 80% on the whole amount rather than 85% on the first slice.
• Bullet loans are measured at maturity. For bullet repayment loans the LTV calculation takes the total amount repayable at maturity, which is principal plus accrued interest. Nothing is paid until the end, so the interest has to fit under the ceiling alongside the principal.
• Twelve months, and no longer. Paragraph 15 caps the tenor of bullet repayment consumption loans at 12 months. A renewal is possible, but only after the accrued interest has been cleared and only for a standard account.
• The ratio holds throughout. The prescribed LTV must be maintained on an ongoing basis for the whole tenor, and every lender has to state in its policy what action follows a breach. This is what turns a falling gold price into a margin call.

Two further rules shape what is accepted. Valuation counts intrinsic metal only, at the lower of the 30 day average closing price and the previous day's closing price from the India Bullion and Jewellers Association or a SEBI regulated exchange, adjusted for actual purity, with stones and gems excluded. And the quantity accepted from one borrower is capped in aggregate across all loans at 1 kilogram of gold ornaments and 50 grams of gold coins, with parallel limits for silver. Collateral has to be released within seven working days of full repayment.

How the eligible amount is worked out

The chain is short. Net weight times purity gives the 22 carat equivalent weight, times the reference price gives the value of the metal. The tier ceiling is applied to that value, and for a bullet loan the ceiling is applied to principal plus maturity interest rather than to principal alone.

Take 50 grams of 22 carat gold at a reference price of ₹9,000 a gram. That round number keeps the arithmetic readable; the calculator opens with a placeholder nearer the published 22 carat rate of about ₹14,300 a gram on 2026-09-03 according to rate trackers, so real eligibility on the same pledge today would be considerably higher. Enter your lender's own figure before relying on any number here.

• Value of the metal. 50 grams at ₹9,000 is ₹4,50,000.
• EMI loan. A loan of ₹3,60,000 sits in the ₹2.5 lakh to ₹5 lakh band, so the ceiling is 80%, and 80% of ₹4,50,000 is exactly ₹3,60,000. At 10.5% over 12 months the instalment is about ₹31,734 and total interest is about ₹20,800. Because the balance falls every month, the interest is not part of the LTV test.
• Bullet loan. The same pledge supports about ₹3,25,790 in hand. Twelve months of simple interest at 10.5% on that amount is about ₹34,210, and the two together come to ₹3,60,000, exactly the 80% ceiling. The effective LTV at disbursal is 72.4%, not 80%.

That difference of roughly ₹34,000 on a single pledge is the single most consequential change in the new framework, and it is invisible in the per gram rates that lenders advertise. State Bank of India's published gold loan terms (retrieved 2026-09-03) show the same logic from the other side: a margin of 35% on the 12 month bullet scheme against 28% on the EMI scheme and 26% on the overdraft, with rates of 9.15% on the bullet scheme and 10.10% on the other two, effective 16.06.2026. NBFC pricing sits higher, with secondary trackers (retrieved 2026-09-03) putting Muthoot Finance schemes from about 10.9% a year upward.

Purity, and what the per gram rate means

Lenders quote a rate for 22 carat and scale everything else in proportion, because 22 carat is 91.6% pure and is what most Indian jewellery is made of. Eighteen carat gold is 75% pure, so a gram of it is worth 18/22 of a gram of 22 carat, about 82%. Fifty grams of 18 carat at the same ₹9,000 reference is worth about ₹3,68,180 rather than ₹4,50,000, and the eligible loan falls with it. Hallmarking gives the carat directly. Where an ornament carries stones, their weight is excluded before any of this starts, so the gross weight on a jeweller's bill is usually higher than the weight the lender will value.

Margin calls, and why headroom is worth having

Because the LTV has to hold for the whole tenor, the maximum loan is also the most fragile one. At the ceiling there is no headroom: the first fall in the reference price takes the account over its limit, and the lender's breach policy applies, which typically means pledging more gold or paying part of the loan down at short notice. Borrowing below the cap buys room. On a bullet loan the maturity-inclusive rule already builds in a cushion, which is why the effective LTV at disbursal comes out in the low seventies rather than at 80%, but that cushion is consumed by the accruing interest rather than reserved for price movements. The calculator reports the percentage fall a chosen amount can absorb, so the trade between cash today and safety later is visible.

Why a gold loan balance transfer rarely pays

Gold loan transfers are marketed heavily, and the arithmetic is worth doing before believing the pitch. Suppose ₹3,00,000 is outstanding on a bullet loan at 12% with six months to run, and another lender offers 10%. The saving is two percentage points on ₹3,00,000 for half a year, which is ₹3,000 in interest.

Against that sit real costs. A processing fee at the new lender of 0.5% is ₹1,500, and 18% GST adds ₹270. A fresh valuation or assaying charge is commonly quoted at ₹250 to ₹1,000. Any foreclosure charge at the old lender comes on top, and while the Pre-payment Charges on Loans Directions, 2025 remove such charges on floating rate loans to individuals for non-business purposes, most gold loans are written at a fixed rate and fall outside that protection. The ornaments must also be physically released by one lender and re-pledged with the other, which takes time and carries its own risk. On a ₹3,000 gross saving those costs leave very little, and on a three month tail they exceed it outright.

The picture changes only where the rate gap is wide, several percentage points rather than one or two, and the remaining tenure is close to a full twelve months on a large balance. Running the numbers for a specific pair of offers takes a minute and settles it. Where a gold loan is being replaced by unsecured borrowing instead, the debt consolidation calculator compares the routes with fees and GST counted, and the personal loan balance transfer calculator handles a like for like loan takeover.

Fees, and what lands in the pocket

Processing fees on gold loans are modest by Indian standards. State Bank of India's published schedule (retrieved 2026-09-03) runs from 0.50% plus GST, subject to a ₹500 minimum, on loans of ₹50,000 to ₹2,00,000, down to 0.30% on larger loans and 0.25% above ₹25 lakh with a ₹15,000 cap. NBFCs commonly charge 0.25% to 2%, or a flat ₹500 to ₹1,500, plus GST. Add a valuation or assaying charge where the lender levies one. The calculator subtracts the fee and its GST from the eligible amount so the cash actually received is visible, and the amount repayable is unaffected by how the fee is charged, since it is deducted rather than financed. Formulas, defaults and known limitations are set out on the methodology page.