What is the maximum gold loan amount that pensioners can avail themselves of?

The maximum gold loan amount that pensioners can avail depends primarily on two factors - the quantity and quality of gold jewellery they pledge, and the loan-to-value (LTV) ratio offered by financial institutions.

Typically, most banks and Non-banking Financial Companies (NBFCs) offer pensioners a maximum LTV ratio of up to 75% on their gold ornaments. This means pensioners can avail of a gold loan up to 75% of the market value of their gold jewellery.

For example, if a pensioner pledges gold jewellery worth ₹5 lakhs as per current market rates, at an LTV of 75%, he/she can avail of a maximum loan amount of ₹3.75 lakhs against this collateral.

Besides LTV policy, the quantity, weight, and quality of gold ornaments pledged also impact the loan amount. The more the gold jewellery pledged in terms of weight and higher its purity, the greater the maximum loan amount sanctioned within the set LTV cap.