The regulation behind the number
A gold loan is secured lending: a bank or NBFC holds the gold as collateral and advances a percentage of its value, called the loan-to-value ratio or LTV. In India that percentage is capped by the Reserve Bank of India, and the cap changed materially in 2026 — to the point that a figure quoted from before April 2026 is now out of date.
The revised structure ties the ceiling to the size of the loan itself: up to 85% for loans up to ₹2.5 lakh, 80% for loans between ₹2.5 lakh and ₹5 lakh, and 75% above that. A further change worth knowing about: the cap is now applied to principal and interest combined, rather than to the principal alone as the older rule allowed — which in practice leaves somewhat less headroom over a loan’s term than the same percentage suggested under the previous rule.
Why this shows three figures rather than one
The tiers are stated as bands of loan amount, which creates a genuine circularity: which percentage applies depends on the loan amount, and the loan amount depends on which percentage applies. Near a boundary that has a real, slightly counterintuitive consequence — gold worth just over the point where 85% would exceed ₹2.5 lakh can produce a smaller maximum loan at 80% than a slightly less valuable lot would produce at 85%, because the whole loan shifts to the lower percentage rather than only the amount above the boundary.
The secondary sources describing this rule are consistent on the three percentages and their bands, but none set out, precisely enough to rely on, exactly how a given lender resolves that circularity for a specific borrower. Rather than build a single confident-looking figure on an assumption this page cannot verify, it shows what each of the three regulated percentages produces and marks whichever one is self-consistent — the same choice this site makes with scrap-gold payout ranges, for the same reason.
What the ceiling is not
This is a regulatory maximum, not a lender’s quote. Interest rate, loan tenure, processing fees and how a specific lender values your gold are all set individually and are not published as one figure any more than diamond prices are — which is why, consistent with the rest of this site, none of them are estimated here. The RBI ceiling states what no lender may exceed; it does not promise that any particular lender will offer it, or that their own gold valuation will match this page’s.