Gold Loan LTV Calculator: Check the Loan Amount Online
Table of Contents
Gold loan LTV calculator helps you to calculate the maximum amount that can be borrowed against gold with the help of three inputs namely net weight of gold, its purity in karats and the current rate of gold. Then, it applies the loan-to-value cap, spitting out a number in seconds. This guide describes how the calculation works and what factors influence the result.
What Is the LTV Ratio in a Gold Loan?
The loan-to-value or LTV is the percentage of the appraised market value of the gold that a lender will loan out. It is the most important factor in determining how much cash a pledge of gold will bring.
The cap is not a flat number anymore. The current RBI framework has tiered maximum LTVs based on the size of the loan: up to 85% for loans up to ₹2.5 lakh, 80% for loans above ₹2.5 lakh and up to ₹5 lakh, and 75% for loans above ₹5 lakh. The same caps apply for both banks and NBFCs. The higher the LTV the more cash you have on hand, but the more you have to pay back so it’s a double-edged sword. Any LTV calculator gold loan India borrowers use should have these tiered caps, not a single flat rate.
How Gold Purity Affects the Loan Amount
Gold content of an ornament, not its total weight, is considered by lenders. It is the net weight of gold that matters. Stones and beads are not counted, nor is the alloy mixed in the jewellery. In karats, purity is measured, and the more karats the more pure gold there is in each gram, and the more the loan value for each gram.
That’s why two ornaments of the same weight can carry very different loan amounts if their purity is different. An 18-karat piece of the same weight will yield less than a 22-karat piece.
Purity-to-Loan Value Quick Reference
The table below is illustrative. It uses a sample 24-karat rate and applies the 85% tier (which covers smaller loans up to ₹2.5 lakh). Actual rates change daily and the applicable LTV depends on the loan size.
|
Karat |
Approx. Purity |
Illustrative Rate per Gram (INR) |
Indicative Loan per Gram at 85% (INR) |
|
24K |
~99.9% |
9,500 |
8,075 |
|
22K |
~91.6% |
8,700 |
7,395 |
|
20K |
~83.3% |
7,915 |
6,728 |
|
18K |
~75.0% |
7,125 |
6,056 |
Note: All figures are indicative. Actual amounts, fees, coverage percentages, and eligibility criteria may vary depending on the lender, borrower profile, loan category, and applicable guidelines at the time of application.
Gold Loan LTV Formula: A Worked Example
The formula is:
Loan Amount = Net Weight (g) × Purity Factor × Gold Rate per Gram × LTV%
Example 1: 20 grams of 22-karat jewellery. Taking an illustrative 22-karat rate of around ₹8,700 per gram, the assessed value is roughly 20 × 8,700 = ₹1,74,000. Because this falls in the up-to-₹2.5-lakh tier, the applicable LTV is up to 85%, giving a maximum loan of about ₹1,47,900.
Example 2: 10 grams of 18-karat gold. At an illustrative 18-karat rate of around ₹7,125 per gram, the assessed value is roughly 10 × 7,125 = ₹71,250. At the 85% tier, the maximum loan works out to about ₹60,560.
The two examples show how both weight and purity move the result. An online calculator gold loan new LTV tool performs this arithmetic automatically once the inputs are entered.
How to Use a Gold Loan LTV Calculator
The steps are simple:
- Enter the gold weight in grams.
- Select the purity or karat from the dropdown.
- The calculator applies the current gold rate.
- View the estimated maximum loan amount.
- Proceed to apply if the estimate suits the requirement.
The estimate is based on the current gold rate and the applicable LTV cap for the loan size. Whether the gold is being pledged for a personal need, such as a medical bill or school fee, or for business working capital, the calculation works the same way: the gold's value and purity drive the figure. A gold loan application with IIFL Finance can be started once the estimate is reviewed.
Factors That Change Gold Loan Eligibility
- Gold purity- The smaller the karat the smaller the per gram value and hence the smaller the loan for the same weight.
- Gold weight- Net weight of gold only is taken into account and not the gross weight of ornament including stones and alloy.
- Daily Gold Rate - the rate changes on every business day and directly impacts the eligible amount.
- LTV tier and Lender Policy - The applicable cap is decided by the loan size under the RBI tiers and a lender can choose to apply a lower LTV under that ceiling as per its own policy.
Given these moving parts, the calculator estimate may not be the same as the final sanctioned amount. The three most common reasons are: the gold rate changing between the estimate and the branch visit, the physical purity test returning a slightly different reading than the karat entered and deduction of stone or alloy weight that the borrower may not have accounted for.
Frequently Asked Questions
The cap is tiered by loan size under the RBI framework: up to 85% for loans up to ₹2.5 lakh, 80% above that up to ₹5 lakh, and 75% above ₹5 lakh. The same caps apply to banks and NBFCs, and a lender may apply a lower LTV within the cap.
Lenders calculate the loan on the pure gold content only. Higher-karat gold has a higher purity factor, so the per-gram loan value is greater. A 22-karat ornament yields more loan per gram than an 18-karat ornament of the same weight, since more of its weight is pure gold.
The calculator gives an estimate based on the current gold rate and the applicable LTV. The final amount is confirmed after the lender physically assesses the gold's purity and weight at the branch. Processing fees and the deduction of any stones may also affect the final figure.
Under the current RBI rules, eligible collateral is gold and silver jewellery, ornaments and specified coins. Gold bars and bullion are not accepted as collateral. Where coins are accepted, purity verification applies, and the same LTV caps apply by loan size.
The calculator generally uses the daily gold rate, refreshed each business day based on prevailing market prices. Borrowers should check the rate on the day they plan to apply, since the figure can change daily and affects the estimate.
Disclaimer : The information in this blog is for general purposes only and may change without notice. It does not constitute legal, tax, or financial advice. Readers should seek professional guidance and make decisions at their own discretion. IIFL Finance is not liable for any reliance on this content. Read more
