With gold prices surging, families can access larger loans against their jewellery, but caution is advised. Gold loans are linked to the market price of gold, with lenders assessing the purity and weight of the jewellery to determine the loan amount based on a loan-to-value (LTV) ratio set by the Reserve Bank of India (RBI). As prices increase, borrowers may be tempted to take out larger loans than necessary, but they must remain aware of the LTV cap that limits borrowing based on gold's value. The loan process is relatively straightforward, with minimal documentation required since jewellery acts as collateral. However, borrowers should consider various repayment structures, including regular EMIs and bullet repayments, while also accounting for processing fees and potential penalties for late payments. Risks include the possibility of auctioning the pledged gold if the borrower defaults, and price volatility can lead to additional collateral requests. Misconceptions about gold loans being universally cheaper or risk-free can lead to financial stress. Before taking a gold loan, borrowers should carefully assess the LTV offered, effective interest costs, repayment schedules, and auction policies to ensure informed decision-making.