Gold loans are fast, need no credit score, and are cheap relative to unsecured borrowing such as a personal loan — but they carry a risk no other retail loan does: default means your gold is auctioned. Borrow against gold for a short, defined need you are certain you can repay, not to plug a recurring shortfall.
| Maximum loan-to-value on gold | 75 % |
|---|---|
| What it means | RBI cap against the value of the gold pledged. Check the current directions. |
as of 2026-08-17 · Reserve Bank of India directions on gold lending · verified
What to know
Banks are typically cheaper than gold loan NBFCs; NBFCs are faster and more accessible, and price accordingly. Who is charging what sits in our gold loan interest rates table. The comparison to run is per-gram lending value against the interest rate together: a lender offering a higher per-gram value at a higher rate may still be the better deal if it means pledging less jewellery, and the reverse is true if you can pledge more.
Read the auction clause before signing. It sets how much notice you get, how the reserve price is fixed, and how any surplus over the outstanding is returned to you. RBI conduct requirements exist here — including on notice and on returning surplus — and they are the part of the contract that matters most on the day it goes wrong.
Frequently asked questions
How much loan can I get on 10 grams of gold?
Up to 75% of the assessed value of the gold under the RBI loan-to-value cap. The rupee amount moves daily with the gold price, and lenders assess only the gold content — stones, and usually making charges, are excluded from the valuation.
Which is cheaper: a bank gold loan or an NBFC gold loan?
Banks generally price lower. NBFCs disburse faster, keep longer hours and have deeper branch networks in smaller towns, and their rates reflect that convenience. If you can wait a day, check a bank first.
What happens if I cannot repay a gold loan?
The lender can auction the pledged gold after giving notice as required. Any surplus over the outstanding must be returned to you. This is the reason a gold loan should never be used for a need you are not confident of repaying — the collateral is usually a household’s most emotionally significant asset. Where the need is larger and longer, a loan against property pledges an asset that is not going into an auction house.
Sources
- Reserve Bank of India — Directions on lending against gold collateral — loan-to-value and auction conduct (primary source)
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