New Gold Loan Rules: Borrow 85% of Your Gold's Value?

From April 2026, RBI lets small borrowers get up to 85% of their gold's value as a loan. Earlier, everyone got max 75%. Smaller loans now unlock more cash from the same gold jewellery.

Here's what happened: RBI introduced a tiered LTV structure from April 1, 2026 — replacing the old flat 75% ceiling for all gold loans.. Loans up to ₹2.5 lakh now get 85% LTV; ₹2.5–5 lakh get 80%; above ₹5 lakh remains at 75% LTV.. Smaller borrowers — including farmers, medical emergency cases, and micro-business owners — benefit most from the higher LTV tiers..

What you should do: Calculate how much extra cash you can unlock: if your gold is worth ₹2 lakh, you can now borrow ₹1.7 lakh instead of the old ₹1.5 lakh limit.. Compare gold loan lenders (banks vs NBFCs vs Muthoot/Manappuram) to find who is offering the new 85% LTV with the lowest interest rate.. Avoid over-borrowing just because the limit is higher — gold prices fluctuate, and a price drop can trigger margin calls or early repayment demands..

If your loan requirement is just above ₹2.5 lakh, splitting it into two smaller loans (if allowed by the lender) could let both qualify for the higher 85% LTV tier, maximising the cash you unlock from the same gold.