Maximum Loan on Gold: What You Can Really Get in India

Thinking about using your gold to get some quick cash? You’re probably wondering, “How much can I actually borrow on the gold I have?” It’s not always what you expect. Banks use strict rules, and even a tiny difference in purity or weight can change the loan amount by thousands of rupees.

The Reserve Bank of India caps the maximum amount banks and NBFCs can lend on your gold—it’s based on something called the ‘Loan-to-Value’ or LTV ratio. But that’s just the headline. In real life, getting the top amount means your gold needs to meet certain criteria, and lenders throw in their own twists with processing fees, appraisal charges, and some sneaky terms you might not notice at first.

You might think you’ll get 90% of your gold’s value in cash, but there’s a catch. The gold’s purity, its actual weight after the bank’s testing, and today’s market price all matter a lot. If your bangles have stones or your chain isn’t 22 karat, expect a lower valuation. Plus, lenders look out for themselves—they give a cushion in case prices drop next month.

Don’t miss simple tricks to push your eligibility higher, and keep an eye on charges that quietly eat into the money you get. If you play it smart, and know what details truly count, you can unlock more cash on your gold without falling for common mistakes.

• How Do Banks Decide Your Gold Loan Amount?
• RBI Rules: LTV Ratios Explained
• Eligibility: Gold Purity and Weight Matter
• Other Charges You Can’t Ignore
• Ways to Boost Your Gold Loan Limit
• Smart Tips for Getting the Best Deal

How Do Banks Decide Your Gold Loan Amount?

You might think walking into a bank with your jewelry means you’ll get cash for the full value, but it’s not that simple. Banks first check the gold’s purity and weight, because only the gold part (not stones or mixed metals) counts towards your maximum gold loan. Don’t be surprised if that fancy pendant fetches less than you expected—banks ignore any diamonds or “22K” labels that aren’t pure.

The next piece of the puzzle is the day’s market rate. Banks usually look up the current price for 22 karat gold. If your gold is less pure, they’ll knock the value down even more. Lenders won’t trust what’s on your bill—they test your gold on the spot with a karat meter or acid test right there at the counter.

Here’s what the basic process looks like for deciding your loan amount:

• Gold testing: Checks the purity and actual gold weight.
• Market price: Uses that day’s 22 karat gold rate as a reference.
• Loan-to-Value (LTV) ratio: Banks can lend up to 75% of the calculated value, sometimes going up to 90% for short periods, as allowed by the RBI.
• Miscellaneous charges: Processing or appraisal fees are often deducted before you even get the money.

Just for fun, check this simple example:

This means, for that much gold, the gold loan eligibility tops out at Rs. 2.43 lakh, before charges. If your jewelry isn’t fully pure or is part of a combo item, the final disbursable loan goes down.

Banks also check your age, ID, and sometimes ask about your source of income or repayment plans, but the gold remains the main thing they care about for these loans. If you’re comparing lenders, pay attention: some banks offer slightly higher percentages, while big NBFCs sometimes toss in lower interest rates or zero processing charges as a promo.

The bottom line: the maximum gold loan number you qualify for depends on what you hand over the counter, the market price that day, and how strict your lender is with their checks. Always go in expecting a little less than your calculations—that way, there are no unpleasant surprises.

RBI Rules: LTV Ratios Explained

Here’s where things get real about the maximum gold loan you can get in India—it's all about the ‘Loan-to-Value’ or LTV ratio, and RBI calls the shots. The LTV ratio is just a fancy term for the percentage of your gold’s current value that lenders are allowed to give you as a loan. The Reserve Bank of India (RBI) sets limits on this to keep things fair and protect both you and the banks when gold prices swing up and down.

Right now, the RBI has fixed the LTV ratio for gold loans at 75%. This means if your gold is valued at ₹1 lakh after testing, the most any bank or NBFC can lend you is ₹75,000. That’s it; lenders can’t legally go above this cap, even if you've seen ads promising more.

There was a time during the COVID-19 pandemic when the RBI allowed up to 90% LTV for a short period, but that window closed in March 2021. Since then, it’s strictly back to 75%. Don’t let anyone tell you different—if you hear about offers for more, you’re probably looking at unregulated or risky lenders, and that’s a red flag.

So, if you’re figuring out your gold loan eligibility, plug in that 75% number—it doesn’t matter which big bank or NBFC you choose, the rule is the same for all. This protects you if gold prices suddenly fall; banks aren’t stuck, and you aren’t hit with unexpected demands to top up your loan or risk a quick auction of your gold.

Here’s what really matters: LTV is counted on the ‘assessed’ value, not what you think your gold is worth. That’s why purity and proper testing at the branch or loan provider’s premises make a big difference (more on that later).

Eligibility: Gold Purity and Weight Matter

Here’s the deal: when you show up at the bank with your gold, they don’t just look at its market price. The two things that really affect your maximum gold loan are the purity and the weight. If you miss out on either, your gold loan eligibility drops fast.

Gold purity is usually measured in karats. Lenders in India almost always want 18 to 22 karat gold. Most will give the best rates if your gold is 22 karat (that’s what most Indian jewellery is). Drop below 18 karat, and most banks won’t accept it at all. If your gold has stones, enamel, or other extras, lenders subtract those before calculating the loan amount, so don’t expect value for anything except the actual gold.

Here’s a common scenario: you walk in with a 30 gram gold chain. The bank tests it, finds out it’s actually 20 karats and only 26 grams are pure gold after they remove stones. For the maximum gold loan, they’ll use that lower number for their math. Not fun, but that’s the reality.

• Pure gold gets you the highest loan amount. Always bring BIS hallmarked jewellery if you can—it helps speed up the checking and often gets you a better valuation.
• Banks may refuse antique or custom-made jewellery if they can’t check the purity properly.
• Coins and bars are sometimes accepted and usually fetch a better price, but only if they meet RBI rules (like being 24 karat and issued by a recognized source).

Some lenders have a minimum gold weight—often 10 grams—before they’ll even process your application. Smaller pieces might not qualify.

So, the takeaway: Check your gold’s purity and actual weight before you even head to the bank. The more pure, the more cash you pocket. If you’re unsure, get your jewellery tested first at a trusted shop—don’t wait for surprises at the bank counter.

Other Charges You Can’t Ignore

So, you’ve checked your gold’s value and figured out how much you can borrow, but the real surprise comes in the extra costs banks and NBFCs stack on top. These can shrink your payout or push up your total repayment—sometimes by a lot.

Here’s the deal: it’s not just about interest. Lenders have a whole menu of fees you need to know about if you’re shopping for a maximum gold loan or want to keep your costs low. Let’s break it down so you know what to watch for:

• Processing Fees: This is the most common one, usually charged as a percentage of your loan amount (ranging from 0.5% to 2%). For example, if you take a loan of ₹2 lakh, you might pay between ₹1,000 and ₹4,000—sometimes even more if you go with NBFCs.
• Valuation Charges: Banks check the purity and weight of your gold using their own tools or by partnering with valuers. They might charge anywhere from ₹250 up to ₹2,000 for this, especially if you have a lot of jewelry or gold coins.
• Foreclosure/Prepayment Charges: Want to pay off your loan early? Some lenders slap on a penalty (usually 1-2%), though many banks waive this for gold loans. Always double-check the terms first.
• Late Payment Penalties: Miss an EMI, and you could owe an extra 2% to 3% per month on the overdue amount—don’t ignore this one. It adds up fast!
• Documentation Charges: Sometimes banks throw in an extra fee just for paperwork. It’s usually a fixed amount, like ₹100 to ₹500, but worth noting if you’re hanging onto every rupee.

If you want to see the difference extra charges make, check out this quick comparison:

Before saying yes to any gold loan, ask the lender for a full list of all charges. Compare at least two or three providers—sometimes the lowest interest rate isn’t the cheapest overall because of these hidden extras. If you can, try negotiating or asking for some charges to be reduced or waived, especially if you’re a regular customer.

Ways to Boost Your Gold Loan Limit

If you want the absolute maximum gold loan from your jewellery or coins, you’ve got to play it smart. Lenders aren’t going to throw money at you just for showing up with a few bangles. Here are some clear, practical steps to squeeze the most cash from your gold.

• Pick Pure Gold: The closer your items are to 22K or 24K purity, the higher their valuation. Most banks use 22K as their standard for calculating maximum gold loan value, so anything lower means less money.
• Avoid Stones and Non-Gold Parts: Only the gold portion counts. If your jewellery has lots of stones, enamel, or attachments, the lender simply deducts everything that isn’t gold. Sometimes, this knocks off 10-30% of the item’s total weight.
• Go for Coins or Simple Jewellery: Pure gold coins (usually 24K) or simple chains without too many designs get near maximum value. Think about pledging them instead of chunky, stone-heavy ornaments.
• Shop Around for the Best LTV: While RBI allows a max of 75% LTV right now, some NBFCs offer special deals after checking paperwork and past loans. Compare banks and NBFCs to see who offers the highest ratio with the least charges.
• Submit the Latest Purchase Bill: If you show proof of purchase and the original gold bill, some banks may accept its purity directly. This avoids disputes and undervaluation during their tests.
• Negotiate the Charges: Ask the lender to reduce processing and appraisal fees. This means more net cash in your hand after all deductions.

Here’s a quick look at how different factors impact the loan amount:

So, if you want to make sure you get the best gold loan India has to offer, bring your purest, simplest pieces, do some homework on lenders, and don’t be afraid to negotiate. Every bit helps when you need extra funds.

Smart Tips for Getting the Best Deal

Want to squeeze the most cash from your gold? It’s not just about walking into the first lender and taking their offer. Here’s how you can get the maximum gold loan amount—without nasty surprises.

• Compare Different Lenders: Everyone promises the “best rate,” but check what percentage of your gold value (the LTV ratio) they actually offer. Some NBFCs push close to the RBI’s 75% limit, while a few banks may go even higher in special schemes. Call or check online before heading to the branch.
• Pledge High-Purity Gold: 22K gold always fetches more. If you mix your 18K and 22K jewelry, lenders often average out, which hurts your eligible amount. Submit only the best pieces if you want the max loan.
• Weigh Your Gold Later in the Day: Sounds odd, but it happens—some appraisal centres’ machines heat up after non-stop use in the afternoon, causing minor weight errors. So, if your gold is heavy, it’s worth popping in early or late to dodge this weird issue.
• Check for Extra Charges: A lower interest rate can hide higher processing fees, valuation charges, or prepayment penalties. Ask for a clear, full list of all charges up front.
• Negotiate if You Have a Good Record: If you’ve taken and repaid gold loans before, use your track record as leverage. You can sometimes nudge lenders to trim charges or offer a higher LTV.
• Don’t Over-Borrow: Just because you can get 75% doesn’t mean you must. The more you borrow, the steeper your interest outgo. Only take what you need; you can always pledge more later if things get tight.

Here’s a quick look at what different lenders in India typically offer as a maximum gold loan percentage:

Interest rates hover between 9% and 24%, so it pays to shop around and factor in every cost—not just the headline rate. If you want the maximum gold loan, your best bet is to show up with clean 22K jewelry, read every fee in the paperwork, and walk out if the numbers look fishy.