How a gold loan amount is decided
A gold loan is a secured loan where you pledge gold as collateral. The lender values your gold at the current rate (adjusted for purity), then lends a percentage of that value — the loan-to-value ratio, or LTV. The eligible loan is simply the gold value multiplied by the LTV.
RBI loan-to-value limits
From April 2026, the RBI moved from a flat 75% cap to a tiered structure based on loan size:
| Loan amount | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| ₹2.5 lakh – ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
These are ceilings, not guarantees. Lenders set their own LTV within these limits based on risk, so the amount you are actually offered may be lower. That is why this calculator defaults to a conservative 65%.
What affects how much you get
The main factors are the weight and purity of your gold and the day's gold rate, which together set the gold value. Stones, gems and non-gold parts are excluded from valuation. Higher purity gold supports a larger loan for the same weight. Always ask the lender how they assess purity and what the final sanctioned amount will be.