How does the fluctuation in gold prices during the loan tenure affect my gold loan?

For most gold loan borrowers, fluctuations in gold prices don’t alter the EMI mid-way. What shifts, though, is the loan-to-value ratio of the gold loan.

If prices increase a bit, it gives your gold loan lender the extra cushion. It won’t automatically raise your limit, but some gold loan lenders might let you top-up if you ask. On the other hand, when prices slip, the cushion reduces. You could get a quick call or message asking to add a little more gold or clear a small part of the balance — this helps keep things within the RBI’s 75% cap for your gold loan.

Most times, small fluctuations don’t matter. But if the fall is sharp or lasts a few weeks, lenders act early to avoid risk. So, it’s worth checking the daily gold rate once in a while, or setting an alert on your gold loan app.