Gold Loan on 500 Gram Gold: How Much Loan Can Be Availed in 2026?

Half a kilogram of ornaments is exactly half the regulatory ceiling, since the RBI (Lending Against Gold and Silver Collateral) Directions, 2025, implemented by regulated lenders from April 2026, cap pledged gold jewellery at 1 kg per borrower. That constraint shapes everything about a borrowing of this size. A gold loan on 500 gram gold, assuming 22 carat ornaments and an illustrative benchmark of ₹14,120 per gram, starts from an assessed value near ₹70.60 lakh and an eligible loan of roughly ₹52.95 lakh at the 75% loan-to-value ceiling, subject to assessment and lender policy. Net pledgeable weight after stone deductions, the repayment structure chosen and the documentation expected on a high-value file decide where the final sanction lands. This guide works through the calculation with a stone deduction shown explicitly, publishes a purity table for exactly 500 grams, compares repayment modes and covers eligibility at this ticket size.

How the Loan Amount on 500 Grams Is Calculated

Three stages produce the number, and none is discretionary. Net gold weight is established by deducting stones, lac filling, enamel and non-gold fittings from the gross 500 grams. That net metal content is valued at the reference price corresponding to its assessed purity, being the lower of the 30-day average and the previous day's closing price published by IBJA or a SEBI-recognised exchange. The LTV percentage applicable to the loan size is then applied.

At half a kilogram the deductions matter more than at any smaller weight, simply because there are more pieces in the lot. A bridal set with heavy stone work can lose 20 grams or more, and at these illustrative rates each gram carries over ₹14,000 in assessed value. The lender's certificate, itemising purity, gross and net weight, deductions and value, settles the question, and a copy is handed to the borrower.

Step-by-Step Worked Example for 500 Grams

1. Gross weight of the ornaments presented: 500 grams.
2. Stone and non-gold deduction assessed by the lender's valuer: 10 grams, leaving net weight of 490 grams.
3. Purity confirmed at 22 carat, which is 91.6% fine, and the reference price for that purity is applied.
4. Net weight multiplied by the reference rate of ₹14,120 per gram gives an assessed value of about ₹69,18,800.
5. The 75% slab applies because the borrowing is above ₹5 lakh, producing an eligible loan of approximately ₹51,89,100.

Without any deduction the same 500 grams would assess at about ₹70.60 lakh and support close to ₹52.95 lakh, so ten grams accounts for roughly ₹1.06 lakh in borrowing capacity. Rates move daily and the figures here are illustrative.

Loan Amount by Gold Purity: 18 Carat to 24 Carat (500 g Table)

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.

Eighteen carat is the practical floor most regulated lenders work to, and the spread is stark: the same 500 grams supports nearly ₹9.6 lakh less at 18 carat than at 22 carat on these illustrative figures. The 24 carat row carries a qualification, since metal at that fineness exists as coins or bars, and the Directions permit only bank-issued coins of 22 carat or above, capped at 50 grams per borrower. Bars, bullion, biscuits, utensils, gold ETFs and digital gold are not eligible at all, so a 500 gram pledge is an ornament pledge in practice.

Can a 500 Gram Pledge Be Split Across Multiple Loan Accounts?

The question comes up because the LTV structure is tiered by loan size: 85% up to ₹2.5 lakh, 80% above that and up to ₹5 lakh, and 75% beyond. On paper, twenty separate loans of ₹2.5 lakh each would draw at 85% rather than 75%, a difference worth several lakh on a holding of this size. In practice the route does not work. The caps in the Directions are expressed per borrower, not per account, and lenders aggregate exposure across accounts for both the collateral ceiling and the LTV tier. The Directions also record that multiple or frequent sanctions to the same borrower are examined closely under anti-money laundering monitoring, and running several loans simultaneously to one borrower attracts stricter internal audit and supervisory examination.

Repayment Options for a Large Gold Loan: EMI, Bullet, and Overdraft

Three structures are commonly offered on a large-ticket pledge, and the total cost differs materially between them. The comparison below uses an illustrative borrowing of ₹20 lakh at 12% per annum, which reflects a borrower drawing against part of the holding rather than the full eligible amount.

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.

Bullet repayment on consumption loans is capped at a 12-month tenure under the Directions, so it cannot be extended beyond that, though it may be renewed after accrued interest is paid. EMI carries a heavier monthly outgo but retires the principal steadily. The overdraft route fits a business drawing in tranches, since an undrawn limit carries no interest. Mode availability and pricing depend on lender policy.

Documents and Eligibility for a 500 Gram Gold Loan

Eligibility rests mainly on the collateral. The applicant is ordinarily an Indian resident who owns the gold pledged and is at least 18 years old, with IIFL Finance accepting applicants aged 18 to 70 at the time of disbursal, and the ornaments meet the lender's purity requirements, generally 18 carat and higher. A declaration of rightful ownership is obtained in every case under the Directions. The standard file commonly consists of a photo identity proof such as Aadhaar, voter ID or passport, PAN or Form 60 whatever applicable, an address proof and a recent passport-size photograph.

High-value pledges attract additional scrutiny. PAN is ordinarily required once the loan crosses ₹5 lakh, and on borrowings running into tens of lakh some lenders seek a declaration on ownership or source of funds under anti-money laundering procedures. For loans up to ₹2.5 lakh, the RBI directions do not mandate income proof or a detailed credit assessment, though lenders may apply their own policies; well above that, a credit assessment is carried out as required. Additional documentation requirements, if any, depend on the lender's policies, loan amount and assessment requirements.

IIFL Finance and Large-Ticket Gold Loan Applications

IIFL Finance may offer a gold loan in a given location, subject to product availability, borrower eligibility, collateral assessment and prevailing regulatory requirements. An application may start online where the channel is available, with an indicative estimate from the IIFL Finance Gold Loan Calculator, though a pledge of 500 grams requires physical assessment in every case. Ornaments are weighed and purity-checked in the customer's presence, charges and repayment terms are set out in writing before signing, and the pledge is held in safe custody at a branch equipped for it. Unlike a sale transaction, a loan against eligible gold collateral generally allows the borrower to retain ownership, subject to repayment and the lender's applicable terms and conditions. Funds are credited once verification and the remaining formalities are complete, and collateral is released within seven working days of full repayment, with compensation of ₹5,000 for each day of delay attributable to the lender.

Conclusion

Half a kilogram of 22 carat jewellery may carry a loan near ₹52.95 lakh on an illustrative ₹14,120 per gram, or closer to ₹51.89 lakh once a ten-gram stone deduction is applied, and around ₹43.36 lakh where the metal is 18 carat. The 75% slab governs at this size, the 1 kg ceiling on ornaments leaves headroom, and splitting the pledge across accounts does not change the tier. Valuation procedures, disclosures, and collateral handling are carried out in accordance with applicable policies and regulations.

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