How is the maximum gold loan amount calculated?

Banks determine the loan amount based on the weight and purity of your gold, multiplying it by the current market rate, and then applying a Loan-to-Value (LTV) ratio cap, typically around 75%.

What is LTV in a gold loan?

LTV stands for Loan-to-Value. It is the maximum percentage of your golds total valuation that a lender is willing to offer as a loan to mitigate market risk.

Gold Loan Calculator

Instantly calculate your maximum eligible loan amount, interest, and monthly EMI based on live parameters.

⚖️ Gold Details

Total Gold Weight

Grams

Gold Purity (Karat)

Current Gold Price (24K) 6500

₹ / Gram

🏦 Loan Requirements

Loan-to-Value (LTV) Ratio 75%

RBI standard cap is usually 75%.

Interest Rate

% p.a.

Loan Tenure

Months

Calculation Results

Max Eligible Loan Amount

₹ 0

Monthly EMI

₹ 0

Total Gold Value

₹ 0

Total Interest Payable

₹ 0

Total Payment (Principal + Interest)

₹ 0

Understanding Your Gold Loan Eligibility

A gold loan is one of the quickest and most secure ways to raise funds during an emergency. By pledging your gold ornaments or coins as collateral, banks and NBFCs (Non-Banking Financial Companies) provide you with instant liquidity. Our Premium Gold Loan Calculator helps you estimate exactly how much money you can raise before you even step into a bank branch.

How is the Loan Amount Calculated?

Gold Purity & Weight: The lender will first check the purity of your gold (usually between 18K to 24K). Only the actual gold weight is considered (stones and gems are deducted).
Valuation: The pure weight is multiplied by the current market rate of gold to arrive at the Total Gold Value.
Loan-to-Value (LTV) Ratio: As per RBI guidelines, lenders can offer a maximum of 75% of your gold's total valuation as a loan. This protects the lender against sudden market price drops.

Frequently Asked Questions

What is Loan-to-Value (LTV)?

LTV is the percentage of the collateral's value that a bank will lend you. For gold loans, the regulatory limit is typically set at 75%. For example, if your gold is valued at ₹1,00,000, the maximum loan you can get is ₹75,000.

Do stones and gems count towards gold weight?

No. When appraising your jewelry, the valuer will deduct the weight of any precious stones, diamonds, or enamel. Only the net weight of the actual gold is used for calculation.

What happens if gold prices drop during my tenure?

If the market price of gold drops significantly, your LTV might exceed the permissible limits. In such rare cases, the lender may ask you to pledge additional gold or prepay a portion of the principal to maintain the required margin.