Gold Loan Guide 2026: Per-Gram Amount, RBI LTV Rules and What a Price Fall Means
My uncle in Coimbatore has taken a gold loan every Diwali for as long as I can remember. He pledges a couple of bangles in October, pays for the festival and a few gifts, and gets them back by February when his crop money comes in. He’s always treated it as the most sensible loan there is: cheap, fast and no questions asked. This year two things have changed. The RBI’s new gold loan rules are fully in force from April 2026, and gold prices just had their sharpest fall in weeks. Both affect how much you can borrow and what happens if prices keep sliding.
This guide covers how much a gold loan gets you per gram at current prices, the RBI’s LTV slabs, what a price crash does to an existing loan, how banks and NBFCs compare, and your rights if things go wrong.
What is a gold loan and why is it booming?
A gold loan is a secured loan where you pledge gold jewellery, ornaments or coins with a bank or NBFC, and get cash based on the gold’s value. You pay interest, repay the loan, and get your gold back. Because the lender holds the gold, credit checks are lighter than for a personal loan, and money can reach you within hours.
It’s become very popular. Moneycontrol reported on 25 September, citing RBI data, that gold loans had grown 4.4 times in two years to about ₹5.52 lakh crore by July 2026. Rising gold prices mean the same jewellery now fetches a much bigger loan than it did two years ago, and tighter rules on unsecured lending pushed more borrowers this way.
RBI’s gold loan LTV rules: the 85/80/75% slabs
LTV stands for loan-to-value, the loan amount as a percentage of the gold’s value. Under the RBI’s Lending Against Gold and Silver Collateral Directions, 2025, which lenders had to adopt by 1 April 2026, the maximum gold loan LTV for consumption loans depends on the total loan amount per borrower.
| Total consumption loan per borrower | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| Above ₹2.5 lakh up to ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
Two details are easy to miss. First, for bullet repayment loans (where you pay principal and interest together at the end), the gold loan LTV is calculated on the total amount repayable at maturity, which includes the interest. Second, the LTV has to be maintained for the whole life of the loan, including every day after you borrow. We’ll come back to why that matters after a price crash.
How much gold loan per gram at today’s price?
Lenders value your gold at the lower of two numbers: the average closing price over the previous 30 days, or the previous day’s closing price. They use prices published by IBJA or a SEBI-regulated commodity exchange, for the actual purity of your gold. Only the gold content counts. Stones, lac and fastenings are deducted.
On 28 September 2026, IBJA’s closing rate for 22K (916) gold was ₹1,35,550 per 10 grams, or ₹13,555 per gram, per IBJA’s published rates. After Monday’s drop, that closing price sits below the 30-day average, so it’s the number a lender would use the next day.
| 22K gold value per gram | At 85% LTV | At 80% LTV | At 75% LTV |
|---|---|---|---|
| ₹13,555 | ₹11,522 per gram | ₹10,844 per gram | ₹10,166 per gram |
These are regulatory maximums. Many lenders lend less than the maximum, especially on bullet loans, to leave a cushion for price swings.
Three worked examples
10 grams of 22K gold. Value ₹1,35,550. The loan is under ₹2.5 lakh, so up to 85% is allowed: roughly ₹1,15,200.
30 grams. Value ₹4,06,650. At 85% the loan would be about ₹3.46 lakh, which crosses ₹2.5 lakh, so the 80% slab applies instead. Maximum: about ₹3,25,300.
50 grams. Value ₹6,77,750. At 80% the loan would be about ₹5.42 lakh, which crosses ₹5 lakh, so the 75% slab applies. Maximum: about ₹5,08,300.
Notice how the slabs step down. The more you borrow in total, the more gold you need to pledge per rupee of loan.
The bullet loan catch
Say you want ₹1,00,000 as a 12-month bullet loan at 9.5% a year. At maturity you’ll owe about ₹1,09,500. The 85% LTV is checked against that ₹1,09,500, so you need gold worth at least ₹1,28,800, which is about 9.5 grams of 22K at today’s rate. With an EMI loan, you’d need a bit less.
What happens to your gold loan when gold prices fall?
This is the question many borrowers are asking this week. Because the RBI requires LTV to be maintained throughout the tenor, a sharp price fall can push your loan above the limit.
Take Priya in Hyderabad. She pledged 20 grams of 22K gold when it was valued at ₹13,555 a gram, total ₹2,71,100, and borrowed ₹2,30,000, close to 85%. If gold falls 10% from here, her gold is worth about ₹2,44,000. Her LTV jumps to around 94%, well above the 85% ceiling.
What happens next depends on the lender’s policy, which the RBI requires them to write down in advance. Typically the lender will ask her to pledge more gold, repay part of the loan, or both. If she can’t, the loan can eventually go into default, and the lender can move towards auction after proper notice.
So if you’re borrowing close to the maximum right now, you’re more exposed to a further fall. Borrowing at 70% to 75% instead of 85% gives you a buffer.
Gold loan interest rate: banks vs NBFCs
The gold loan interest rate varies a lot, and the headline “starting from” rate is usually for the best scheme, often with a lower LTV. The table below gives a rough picture as of September 2026. Treat the numbers as indicative ranges and get the actual rate in the Key Fact Statement before signing.
| Public sector banks (e.g. SBI) | Private banks | Gold loan NBFCs (e.g. Manappuram, Muthoot) | |
|---|---|---|---|
| Typical starting rate | Around 8.75%–10% a year | Around 9.3% a year upward | From about 9.9% a year; many schemes 17%–24%+ |
| Speed | Same day to a couple of days | Same day usually | Often under an hour |
| Branch reach | Wide, but gold desks vary | Mostly urban | Dense network, including small towns |
| Repayment options | EMI, bullet, overdraft | EMI, bullet | Many schemes: monthly, quarterly, bullet |
| Paperwork | Slightly more | Moderate | Minimal |
Manappuram’s own interest rate page shows why the headline can mislead: its schemes start at 9.90% but the annualised rates on other schemes go up to about 26.8%. The rate depends heavily on the LTV you choose and how often you pay interest. Pay monthly and the rate is usually lower; skip payments and penal rates can kick in.
A PSU bank is usually cheapest if you have a few days and a branch nearby. An NBFC makes sense when speed matters more than the last percentage point, but ask about the rate after the first few months, since some schemes step up if interest isn’t paid on time.
Gold loan vs personal loan vs credit card EMI
For a festive expense of ₹1 lakh repaid over a year, here’s how the options compare on interest alone.
| Option | Illustrative rate | Approx. interest on ₹1 lakh for 12 months (EMI) |
|---|---|---|
| Gold loan (bank) | 9.5% | About ₹5,200 |
| Personal loan | 13% | About ₹7,200 |
| Credit card EMI | 16% | About ₹8,900 |
| Credit card revolving balance | ~42% | Far higher |
On cost, the gold loan vs personal loan choice usually goes to gold, provided you already own the gold and don’t mind locking it away. A personal loan doesn’t put your jewellery at risk, and it’s better if you don’t have much gold or can’t handle margin calls if prices fall. Our guide to personal loans in India covers eligibility and rates. And if you’re tempted to just revolve a credit card balance, read how credit card interest adds up first.
The other side of the gold loan vs personal loan comparison is emotional. Many families simply don’t want to risk their jewellery, and that’s a perfectly reasonable reason to pay a bit more.
Your rights as a gold loan borrower
The 2025 directions added real protections. They’re worth knowing before you pledge anything.
At the time of the loan
You have to be present when the gold is assayed. The lender must explain deductions for stones and fastenings and give you a certificate showing purity, gross and net weight, a photo and the value. All charges, including assaying and auction charges, must be in the loan agreement and the Key Fact Statement. For loans above ₹2.5 lakh in total, the lender also has to check your repayment capacity.
When you repay
Once you repay in full, the lender must return your gold the same day or within seven working days at most. If it’s late for reasons on the lender’s side, it owes you ₹5,000 for every day of delay. If the gold is damaged while pledged, the lender pays for repair. If it’s lost, the lender must compensate you.
If it goes to auction
The lender must give you notice to repay before starting an auction. It must advertise the auction in at least two newspapers, one national and one in the regional language. The reserve price can’t be below 90% of the gold’s current value (85% if two auctions fail). The lender and its related parties can’t bid. After the sale, it must show you the auction proceeds and refund any surplus within seven working days.
If you ever fall behind, talk to the lender early. Our piece on what happens when you default on a loan explains the broader consequences.
Other limits worth knowing
Bullet repayment consumption loans are capped at 12 months, though you can renew after paying the accrued interest. The total gold ornaments pledged per borrower can’t exceed 1 kg, and gold coins can’t exceed 50 grams. Lenders can’t give you a loan to buy gold, whether jewellery, coins, ETFs or gold mutual funds.
If you’re watching prices before pledging, our piece on why gold and silver prices crashed on 28 September has the full numbers.
FAQ: gold loan
How much gold loan can I get per gram today?
At the 28 September IBJA 22K rate of ₹13,555 per gram, the maximum is about ₹11,522 per gram at 85% LTV for loans up to ₹2.5 lakh. Lenders often give less.
What happens to my gold loan if gold prices fall?
If your LTV goes above the limit, the lender can ask you to add gold or repay part of the loan. Its policy on LTV breaches must be spelt out in advance.
Is a gold loan interest rate lower at banks or NBFCs?
Usually lower at public sector banks. NBFCs are faster and more flexible, but their higher-LTV schemes can cost much more.
Can I take a gold loan to buy gold for Dhanteras?
No. RBI rules bar lenders from giving loans to buy gold in any form.
How soon must the lender return my gold?
Within seven working days of full repayment at most. After that, the lender owes ₹5,000 a day if the delay is its fault.
Does a gold loan affect my CIBIL score?
Yes. It’s reported like any other loan, so timely repayment helps and default hurts.
A gold loan is still one of the cheapest ways to raise short-term money in India, as long as you borrow with some room to spare. My uncle, for what it’s worth, has decided to borrow a bit less than usual this year and leave a buffer in case prices keep falling. That seems about right.
Disclaimer: Loan amounts are illustrative, based on IBJA rates of 28 September 2026 and RBI’s 2025 directions. Actual LTV, rates and charges vary by lender. This is not financial advice.
