By BillCut
Last updated: 22 October 2026
Under the gold loan rules 2026, you can borrow up to 85% of your gold’s value on loans up to Rs 2.5 lakh, 80% on loans above Rs 2.5 lakh up to Rs 5 lakh, and 75% above Rs 5 lakh. Silver jewellery and coins now count as collateral too, and lenders had to follow these rules by 1 April 2026.
What are the new gold loan rules 2026 ₹
The Reserve Bank of India issued the Lending Against Gold and Silver Collateral Directions, 2025 in June 2025. Lenders had to comply no later than 1 April 2026.
The rules apply to commercial banks (including small finance banks, regional rural banks and local area banks, but not payments banks), urban and rural co-operative banks, and all NBFCs, including housing finance companies.
An amendment dated 29 September 2025 clarified that lenders may not lend to you to buy gold, or against primary gold or silver such as bullion. It did not change the LTV limits.
What is the gold loan LTV limit now?
LTV, or loan to value, is the loan amount as a share of your collateral’s value. For consumption loans, the RBI caps it by the total amount you borrow against gold and silver.
| Total loan amount | Maximum LTV |
|---|---|
| Up to Rs 2.5 lakh | 85% |
| Above Rs 2.5 lakh up to Rs 5 lakh | 80% |
| Above Rs 5 lakh | 75% |
The lender must keep the LTV within this limit for the whole loan, not just on day one. If gold prices fall and you cross the cap, what happens depends on the lender’s policy, so ask before you sign.
How much can you borrow against your gold?
These illustrative figures assume EMI repayment and the eligible value shown after purity testing.
| Eligible value of your gold | Maximum loan | LTV that applies |
|---|---|---|
| Rs 2,00,000 | Rs 1,70,000 | 85% |
| Rs 5,00,000 | Rs 4,00,000 | 80% |
| Rs 10,00,000 | Rs 7,50,000 | 75% |
Bullet repayment loans work differently. For these, the loan amount used to check LTV is the total you must repay at maturity, including interest. So with gold worth Rs 2,00,000 and an illustrative 10% interest for one year, the most you could borrow upfront is about Rs 1,54,545, because Rs 1,54,545 plus Rs 15,455 interest equals the Rs 1,70,000 cap.
Bullet loans for consumption are now capped at 12 months. You can renew one only after paying any interest due, and only if the loan is in good standing and within the LTV limit.
How do lenders value your gold and silver?
Lenders must value your jewellery at its actual purity, counting only the metal. Stones, gems and fastenings are excluded. The price used is the lower of the 30-day average closing price or the previous day’s closing price, published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange.
You must be present when your gold is tested, and you get an assay certificate recording purity, weight, deductions and value. Your gold is checked against it on return.
There are also limits on how much you can pledge in total per borrower: 1 kg of gold ornaments, 50 grams of gold coins, 10 kg of silver ornaments and 500 grams of silver coins.
What happens if you cannot repay a gold loan?
If you default, the lender can auction your jewellery, which may include pieces with family value that money cannot replace. The new rules add safeguards:
- You must get adequate notice to repay or settle before an auction starts.
- The reserve price must be at least 90% of the current value, or 85% after two failed auctions.
- Any surplus after your dues are cleared must be refunded within seven working days of the lender receiving the full proceeds.
A shortfall can still be recovered from you under the loan agreement. If a gold loan is being used to cover card dues or other EMIs that keep growing, it may help to compare whether one structured EMI without pledging your jewellery would cost less overall. Check your options with BillCut.
How quickly must the lender return your gold?
Once you repay in full, the lender must release your gold the same day, and in any case within seven working days. If the delay is the lender’s fault, it must pay you Rs 5,000 for each day beyond that limit.
Your loan agreement and Key Fact Statement must set out the auction process, the notice period, release timelines and all charges. Under the Reserve Bank of India’s KFS circular, retail term loans get a KFS showing the annual percentage rate. Late payment can only attract a disclosed penal charge, not extra penal interest, under the RBI penal charges rules.
What should you do before taking a gold loan?
- Ask the lender for its valuation method, which it must publish on its website, and compare quotes.
- Attend the purity test and check every deduction on your assay certificate.
- Read the KFS for the APR, all charges, the auction notice period and the release timeline.
- Prefer an EMI structure if a single bullet payment at the end may be hard to arrange.
- Think about whether you can afford to lose the jewellery. BillCut compares secured and unsecured loans and explains digital versus physical gold.
If your lender delays returning your gold or will not explain charges, complain in writing first, then escalate through the Reserve Bank of India’s ombudsman and complaints system.
How BillCut can help
BillCut is a balance transfer and debt reduction platform. It works with lending partners to help eligible borrowers move high interest dues, such as credit card balances and personal loan EMIs, into one structured EMI. BillCut earns from helping borrowers refinance, so it has an interest in this option. Approval and terms depend on the partner lender, and a switch only makes sense if the total cost after fees is lower. If you are weighing a quick loan for an urgent need, read when not to take a personal loan.
Frequently asked questions
What is the maximum LTV on a gold loan in 2026 ₹
For consumption loans, the RBI allows up to 85% for loans up to Rs 2.5 lakh, 80% above Rs 2.5 lakh up to Rs 5 lakh, and 75% above Rs 5 lakh.
When did the new RBI gold loan rules come into effect?
Lenders had to comply with the Lending Against Gold and Silver Collateral Directions, 2025 no later than 1 April 2026. Loans sanctioned before a lender adopted them follow the older guidelines.
Can I take a loan against silver jewellery?
Yes. Silver jewellery, ornaments and coins are eligible collateral, up to 10 kg of silver ornaments and 500 grams of silver coins per borrower.
How do lenders calculate the value of my gold?
They value only the metal at its actual purity, using the lower of the 30-day average closing price or the previous day’s closing price. Stones and gems are excluded.
How long can a bullet repayment gold loan run?
A consumption gold loan with bullet repayment is capped at 12 months. It can be renewed only after paying interest due, if the loan is in good standing and within LTV limits.
What compensation do I get if my gold is returned late?
If the lender causes a delay beyond seven working days after full repayment, it must pay you Rs 5,000 for each day of delay.
Can a lender auction my gold without telling me?
No. The lender must give you adequate notice to repay first and advertise the auction in two newspapers. If you cannot be traced, it must wait one month after a public notice.
This article is for general information only and is not financial advice. Gold prices and lender policies change, and the loan figures above are illustrative. Check your loan documents and speak to your lender or a qualified professional before making decisions.
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