Key Highlights

• The Loan-to-Value (LTV) ratio determines how much money you can borrow against your gold. Shriram Gold Loan currently offers up to 80%* of your gold's assessed value.

• The Reserve Bank of India (RBI) revised its LTV framework in April 2026.

• Higher gold purity means a higher assessed value, and potentially more loan per gram.

• Shriram Gold Loan can be foreclosed any time; no foreclosure charges apply.

• Interest is calculated on a per-day basis for the actual number of days the loan is utilised. A minimum interest period of 7 days applies.

How the Loan-to-Value Ratio Actually Works

As a leading NBFC, Shriram Finance’s gold loan branch executives process several gold loan applications every year. One of the most common questions they hear: “will I get a higher loan amount if I pledge more gold?" The answer is yes, but not for the reason most borrowers assume.

The LTV ratio is the percentage of your pledged gold’s market value that a lender advances as a loan. The formula is straightforward:

(Loan Amount ÷ Assessed Gold Value) × 100 = LTV%

So, if your gold is assessed at ₹1,00,000 and the lender offers a 75% LTV, you can borrow up to ₹75,000.

The operative word is assessed. Lenders don’t use market rate alone; they weigh the gold, determine its purity, and strip out any embedded stones or non-gold elements before arriving at a net gold value.

That figure, not the jeweller’s purchase price or your own estimate, is what the LTV ratio is applied to.

Calculate how much loan your gold is eligible for with the Shriram Gold Loan Calculator.

What Changed with the RBI’s April 2026 LTV Framework

The Reserve Bank of India updated its gold loan LTV guidelines in April 2026, and for borrowers, the change is significant. The RBI’s April 2026 framework introduced a purpose-linked LTV, which means the same gold can get you a different loan amount depending on what you tell the lender you need the money for.

Under the revised framework, NBFCs can now offer:

• Up to 85% for loans up to ₹2.5 lakh

• Up to 80% for ₹2.5 lakh to ₹5 lakh

• Up to 75% above ₹5 lakh

The intent behind the differentiation is to give borrowers with productive use-cases access to more of their gold’s value while keeping consumption lending at a prudent level.

How NBFCs Assess Your Gold Before Setting the LTV

The gold valuation process is more rigorous than most borrowers expect. Here's what happens when you walk into a Shriram Finance branch:

1. Authenticity check: The gold is examined for hallmarking, which confirms purity.

1. Gross weight measurement: All pieces are weighed together.

1. Net gold weight calculation: Stones, clasps, and non-gold elements are excluded.

1. Purity-adjusted value: The net gold weight is multiplied against current market rates for that specific carat.

1. Loan eligibility: The applicable LTV percentage is applied to this final value.

A few things influence where your loan lands within the eligible range: the purity of the gold (22 karat fetches more than 18 karat), current market rates on the day of valuation, and the specific loan purpose you're applying for under the new framework.

To know how the type of your gold jewellery pledged influences LTV, read which type of gold ornament gives you the highest value per gram on gold loans?

Why the LTV Ratio Protects You as Much as the Lender

It’s tempting to think of a lower LTV as the lender being conservative at your expense. Since gold prices move, a loan sanctioned at 80% LTV today could find itself underwater if gold rates drop by 15% over the next few months.

At that point, the lender may require additional collateral or partial repayment, and you end up under pressure. A lower LTV creates a buffer that protects you from that scenario.

The lender’s risk and your risk are, in this case, the same risk. That’s worth keeping in mind when you compare LTV offers across providers.

Explore Shriram Gold Loan features and charges before you apply.

How Shriram Gold Loan Handles Repayment and Foreclosure

Interest on Shriram Gold Loan is calculated on a per-day basis for the actual number of days the loan is utilised. A minimum interest period of 7 days applies from the date of disbursal.

If you get funds on an unexpected source before your tenure ends, you can foreclose the loan with zero foreclosure charges.

Since many borrowers take gold loans for short-term needs (a medical bill, a business payment, a wedding expense), and expect to close within weeks, the per-day interest structure means you pay only for what you use.

To know more on what gold loan repayment options are available to your, read gold loan repayment options — 5 methods explained.

Apply for Shriram Gold Loan — rates starting at 10%* p.a.

FAQs

How is the LTV ratio calculated for a gold loan?

Divide the loan amount by the assessed value of your pledged gold and multiply by 100. For example: a ₹75,000 loan against gold assessed at ₹1,00,000 gives an LTV of 75%.

What LTV ratio does Shriram Gold Loan offer?

Shriram Gold Loan currently offers up to 80%* of your gold's assessed value. The applicable LTV is subject to Shriram Finance's assessment and prevailing RBI guidelines.

Does my credit score affect the LTV I receive?

Shriram Gold Loan does not require a credit check. Your LTV is determined by the purity and weight of your gold, current market rates, and the loan purpose, not your credit score.

Can I foreclose my gold loan early?

Yes. You can foreclose Shriram Gold Loan any time, and no prepayment or foreclosure charges apply. You pay the outstanding principal and interest for the actual days utilised.

Is the LTV ratio different for gold bars versus gold jewellery?

The LTV limit is applied to the gold that the lender accepts as collateral. For a product that mainly accepts gold jewellery, the loan amount is usually based on the assessed value of eligible ornaments, subject to the applicable LTV limit. Gold bars or biscuits may not be accepted unless the lender’s policy specifically allows them.