India, Dec. 17 -- The Loan-to-Value (LTV) ratio in Gold Loans is the percentage of your gold's appraised market value that a lender is willing to disburse as a loan amount. It is calculated using the formula: (Loan Amount / Appraised Gold Value) x 100. For instance, if your gold is valued at Rs.1,00,000 and the lender offers a 75% LTV, you can borrow up to Rs.75,000. Regulated by the RBI, this ratio, typically capped at 75% for NBFCs, helps lenders manage risk while enabling borrowers to access substantial funds without selling their gold. A higher LTV maximises your borrowing power.

The RBI publishes guidelines regularly to set the applicable LTV ratio. According to the latest guidelines, the RBI allows lenders to provide an LTV ratio o...