@LoadBalanced not working with RestClient spring boot 4, Java 21

Hi, I have a simple consumer & provider setup and I am using eureka for service discovery. I'm just trying out all the RestClients and using @LoadBalanced annotation with them. RestTemplate and WebClient work fine but for RestClient I keep getting this error. I've pasted my code below for the consumer for restClient. Could I have some help please, I would really appreciate it.

2026-01-07T12:03:16.073Z  INFO 54010 --- [consumer] [reshExecutor-%d] com.netflix.discovery.DiscoveryClient    : Getting all instance registry info from the eureka server
2026-01-07T12:03:16.075Z  WARN 54010 --- [consumer] [beatExecutor-%d] o.s.c.l.core.RoundRobinLoadBalancer      : No servers available for service: localhost
2026-01-07T12:03:16.076Z  INFO 54010 --- [consumer] [beatExecutor-%d] c.n.d.s.t.d.RedirectingEurekaHttpClient  : Request execution error. endpoint=DefaultEndpoint{ serviceUrl='http://localhost:8761/eureka/}, exception=No instances available for localhost stacktrace=java.lang.IllegalStateException: No instances available for localhost
	at org.springframework.cloud.loadbalancer.blocking.client.BlockingLoadBalancerClient.execute(BlockingLoadBalancerClient.java:78)
	at org.springframework.cloud.client.loadbalancer.LoadBalancerInterceptor.intercept(LoadBalancerInterceptor.java:55)
	at org.springframework.cloud.client.loadbalancer.DeferringLoadBalancerInterceptor.intercept(DeferringLoadBalancerInterceptor.java:54)
	at org.springframework.http.client.ClientHttpRequestInterceptor.lambda$andThen$0(ClientHttpRequestInterceptor.java:76)
	at org.springframework.http.client.ClientHttpRequestInterceptor.lambda$apply$0(ClientHttpRequestInterceptor.java:89)
	at org.springframework.http.client.InterceptingClientHttpRequest.executeInternal(InterceptingClientHttpRequest.java:73)
	at org.springframework.http.client.AbstractBufferingClientHttpRequest.executeInternal(AbstractBufferingClientHttpRequest.java:50)
	at org.springframework.http.client.AbstractClientHttpRequest.execute(AbstractClientHttpRequest.java:80)
	at org.springframework.web.client.DefaultRestClient$DefaultRequestBodyUriSpec.exchangeInternal(DefaultRestClient.java:609)
	at org.springframework.web.client.DefaultRestClient$DefaultRequestBodyUriSpec.exchange(DefaultRestClient.java:567)
	at org.springframework.web.client.RestClient$RequestHeadersSpec.exchange(RestClient.java:750)
	at org.springframework.web.client.DefaultRestClient$DefaultResponseSpec.executeAndExtract(DefaultRestClient.java:896)
	at org.springframework.web.client.DefaultRestClient$DefaultResponseSpec.toEntityInternal(DefaultRestClient.java:842)
	at org.springframework.web.client.DefaultRestClient$DefaultResponseSpec.toEntity(DefaultRestClient.java:831)
	at org.springframework.cloud.netflix.eureka.http.RestClientEurekaHttpClient.sendHeartBeat(RestClientEurekaHttpClient.java:91)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator$3.execute(EurekaHttpClientDecorator.java:92)
	at com.netflix.discovery.shared.transport.decorator.RedirectingEurekaHttpClient.executeOnNewServer(RedirectingEurekaHttpClient.java:121)
	at com.netflix.discovery.shared.transport.decorator.RedirectingEurekaHttpClient.execute(RedirectingEurekaHttpClient.java:80)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator.sendHeartBeat(EurekaHttpClientDecorator.java:89)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator$3.execute(EurekaHttpClientDecorator.java:92)
	at com.netflix.discovery.shared.transport.decorator.RetryableEurekaHttpClient.execute(RetryableEurekaHttpClient.java:120)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator.sendHeartBeat(EurekaHttpClientDecorator.java:89)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator$3.execute(EurekaHttpClientDecorator.java:92)
	at com.netflix.discovery.shared.transport.decorator.SessionedEurekaHttpClient.execute(SessionedEurekaHttpClient.java:76)
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator.sendHeartBeat(EurekaHttpClientDecorator.java:89)
	at com.netflix.discovery.DiscoveryClient.renew(DiscoveryClient.java:845)
	at com.netflix.discovery.DiscoveryClient$HeartbeatThread.run(DiscoveryClient.java:1403)
	at java.base/java.util.concurrent.Executors$RunnableAdapter.call(Executors.java:572)
	at java.base/java.util.concurrent.FutureTask.run(FutureTask.java:317)
	at java.base/java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1144)
	at java.base/java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:642)
	at java.base/java.lang.Thread.run(Thread.java:1583)

2026-01-07T12:03:16.076Z  WARN 54010 --- [consumer] [beatExecutor-%d] c.n.d.s.t.d.RetryableEurekaHttpClient    : Request execution failed with message: No instances available for localhost
2026-01-07T12:03:16.076Z ERROR 54010 --- [consumer] [beatExecutor-%d] com.netflix.discovery.DiscoveryClient    : DiscoveryClient_CONSUMER/10.255.255.254:consumer:8080 - was unable to send heartbeat!

com.netflix.discovery.shared.transport.TransportException: Cannot execute request on any known server
	at com.netflix.discovery.shared.transport.decorator.RetryableEurekaHttpClient.execute(RetryableEurekaHttpClient.java:112) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator.sendHeartBeat(EurekaHttpClientDecorator.java:89) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator$3.execute(EurekaHttpClientDecorator.java:92) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.shared.transport.decorator.SessionedEurekaHttpClient.execute(SessionedEurekaHttpClient.java:76) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.shared.transport.decorator.EurekaHttpClientDecorator.sendHeartBeat(EurekaHttpClientDecorator.java:89) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.DiscoveryClient.renew(DiscoveryClient.java:845) ~[eureka-client-2.0.5.jar:2.0.5]
	at com.netflix.discovery.DiscoveryClient$HeartbeatThread.run(DiscoveryClient.java:1403) ~[eureka-client-2.0.5.jar:2.0.5]
	at java.base/java.util.concurrent.Executors$RunnableAdapter.call(Executors.java:572) ~[na:na]
	at java.base/java.util.concurrent.FutureTask.run(FutureTask.java:317) ~[na:na]
	at java.base/java.util.concurrent.ThreadPoolExecutor.runWorker(ThreadPoolExecutor.java:1144) ~[na:na]
	at java.base/java.util.concurrent.ThreadPoolExecutor$Worker.run(ThreadPoolExecutor.java:642) ~[na:na]
	at java.base/java.lang.Thread.run(Thread.java:1583) ~[na:na]

package com.demo.consumer.restclient;

import org.springframework.cloud.client.loadbalancer.LoadBalanced;
import org.springframework.context.annotation.Bean;
import org.springframework.context.annotation.Configuration;
import org.springframework.web.client.RestClient;

@Configuration
public class RestClientConfig {

    @Bean
    @LoadBalanced
    public RestClient.Builder loadbalancedRestClientBuilder() {
        return RestClient.builder();
    }

    @Bean
    public RestClient restClient(@LoadBalanced RestClient.Builder builder) {
        return builder.baseUrl("http://provider")
                .build();
    }
}

package com.demo.consumer.restclient;

import lombok.RequiredArgsConstructor;
import org.springframework.stereotype.Service;
import org.springframework.web.client.RestClient;

@Service
@RequiredArgsConstructor
public class ProviderRestClient {
    private final RestClient restClient;

    public String getInstanceInfo() {
        return restClient.get()
                .uri("/instance-info")
                .retrieve()
                .body(String.class);
    }
}

package com.demo.consumer.restclient;

import org.springframework.web.bind.annotation.GetMapping;
import org.springframework.web.bind.annotation.RequestMapping;
import org.springframework.web.bind.annotation.RestController;

@RestController
@RequestMapping("/api/rest-client")
public class RestClientController {

    private final ProviderRestClient providerRestClient;

    public RestClientController(ProviderRestClient providerRestClient) {
        this.providerRestClient = providerRestClient;
    }

    @GetMapping("/instance")
    public String getInstance(){
//        RestClient restClient = RestClient.create();
//        String response = restClient.get()
//                .uri("http://localhost:8081/instance-info")
//                .retrieve()
//                .body(String.class);
        return providerRestClient.getInstanceInfo();
    }
}

spring:
  application:
    name: consumer

server:
  port: 8080

eureka:
  client:
    service-url:
      defaultZone: http://localhost:8761/eureka
    register-with-eureka: true
    fetch-registry: true

Start with the supplied RestClientConfig and ProviderRestClient, then trace the reported path through BlockingLoadBalancerClient, LoadBalancerInterceptor, and RestClientEurekaHttpClient. Reproduce the consumer/provider setup with Eureka and compare the RestClient behavior with the working RestTemplate and WebClient cases. Done means @LoadBalanced RestClient resolves the provider service instead of reporting no instances for localhost.