By Pledging your Gold Jewellery Avail Higher Gold Loan Amount

As per a report published on 6th August 2020, RBI increased the maximum loan to value ratio (LTV) for a gold loan from 75% to 90% for non-agricultural purposes.  

This increased LTV has left an immense impact on the gold loan market as households/individuals can now avail higher gold loan amounts by pledging their jewellery. 

Loan to value ratio or LTV refers to the loan amount one gets against the collateral. Since RBI has increased the capped at 90%, individuals can get even more loan amounts against the same pledged jewellery than they used to get before. 

For instance, for jewellery worth Rs.1 lakh, and a current LTV of 90%, an individual can get up to Rs.90000. However, previously where LTV was capped at 75%, individuals would acquire only up to Rs.75000. Thus, individuals can secure higher gold loan amounts with increased LTV.

Apart from the higher gold loan amount, individuals can save substantially by availing of loans against gold. The secured nature of gold loans facilitates reduced borrowing costs when compared to other unsecured loans, which means individuals can save a considerable amount of money.  

Further, by applying for an online gold loan, individuals can save ample time as they can avail of gold financing and complete gold appraisal and document verification from the comfort of their homes. Moreover, renowned NBFCs extend doorstep gold loan services, making the loan availing process during urgent cash requirements easier and feasible.

With increased LTV, individuals can pledge gold jewellery and easily get a higher gold loan amount.