What is the highest loan amount that can be availed through a gold loan top-up?

A gold loan top-up allows existing gold loan borrowers to avail of additional funds against their gold jewellery without having to pledge additional gold. The maximum top-up amount an individual can avail depends on several factors.

1. Loan-to-Value (LTV) Ratio: Most loan providers provide top-up loans up to a certain percentage of the total gold value already pledged. This percentage is known as the LTV ratio and is up to 75%, according to RBI’s guidelines.
2. Type of Gold: The purity of the gold pledged also impacts the maximum top-up amount. Typically, lenders provide higher LTV against high-purity (22K-24K) gold compared to low-purity (18K-20K) gold.
3. Credit History: Existing borrowers with a good repayment track record and credit score can be sanctioned with a higher top-up amount than others.
4. Overall Loan Amount: Most banks or NBFCs cap the total loan amount including the top-up to a certain value. So, if someone already has a ₹10 lakh outstanding gold loan, their top-up eligibility would be lower.