Margin calls in gold loans: Avoid borrowing over 50-60% of pledged value
Last Update Date: 06-10-2026
Published by Business Standard
Abhishek Kumar's role: Quoted
Abhishek Kumar cautioned that borrowing at a high loan-to-value ratio means even a small price fall can trigger a margin call. He said bullet repayment is risky when prices fall and suggested not pledging heirloom jewellery.
More of Abhishek's views on debt and loans
After a sharp fall in gold prices, the article explains how margin calls arise on gold loans when the loan-to-value ratio crosses its limit. It covers revised RBI loan-to-value slabs, the time lenders allow before auction, ways to raise funds, the trade-offs of shorter tenures and the risks of bullet repayment.
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Margin calls in gold loans: Avoid borrowing over 50-60% of pledged value