Silver Loan: After gold loans, the Reserve Bank is now also kind to silver. How will it be a support in times of trouble..

You can take a loan against silver, just like you would against gold. The Reserve Bank of India (RBI) has issued a new circular for this purpose. It's called the Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025. It outlines specific rules that will come into effect from April 1, 2026. These rules will make it easier to take a loan against silver.

Home Loan Repayment: Savings of ₹19 lakh on a home loan of ₹60 lakh. This trick can save you money and time, experts explain.

These banks and companies will offer silver loans:
All commercial banks (including small finance banks and regional rural banks).

Urban and rural cooperative banks.

NBFCs (non-banking financial companies) and housing finance companies.

Who can take a loan against silver?

The Reserve Bank has prohibited lending directly against gold or silver (i.e., bullion) for certain reasons. This has been done to prevent any major disruption to the economy. However, banks and companies can offer loans to customers against gold jewelry, ornaments, and coins. This will help people meet their small financial needs.

How much gold and silver can be pledged?

According to a Reserve Bank circular, the total weight of jewelry pledged for all loans to a single customer should not exceed the following limits:
Gold jewelry: No more than 1 kilogram.
Silver jewelry: No more than 10 kilograms.
Gold coins: No more than 50 grams.
Silver coins: No more than 500 grams.

How much will the loan amount be?
The loan amount will depend on the loan-to-value (LTV) ratio. This refers to how much money you can borrow against your pledged gold or silver. It indicates how much you can get for every ₹100 of precious metal you pledge.

If the loan amount is up to ₹2.5 lakh, the maximum LTV will be 85%. This means you can get a loan up to 85% of the value of your gold and silver. Similarly, if the loan amount is between ₹2.5 lakh and ₹5 lakh, the maximum LTV will be 80%. If the loan amount exceeds ₹5 lakh, the maximum LTV will be 75%.

Disclaimer: This content has been sourced and edited from Navbharat Times. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.