Gold Loan: How is it Calculated? 5 Key Things You Must Know Before Taking One!

• Gold loans offer quick cash against ornaments, with lower interest rates than personal loans, but understanding RBI rules and LTV is crucial.
• Only gold ornaments and coins are eligible; gold bars, biscuits, or Gold ETFs are not accepted for loans.
• Loan amount depends on gold price and LTV: 85% for up to Rs. 2.5 lakhs, 80% for Rs. 2.5-5 lakhs, and 75% for over Rs. 5 lakhs.
• Banks assess gold purity and value based on the lower of the last 30-day average or previous day's closing price; no value for stones or design.
• Banks are responsible for the security of pledged gold; delays in returning gold after full repayment incur a Rs. 5,000 per day penalty.