Gold Loan Calculator
Loans & EMISee how much you can borrow against your gold — capped by the LTV ratio — and what the EMI and interest will cost.
In short: A gold loan lets you borrow up to a fixed loan-to-value (LTV) percentage of your pledged gold’s market value — RBI caps banks at 75% — so 50 g of 22K gold worth ₹7,000/g gives a gold value of ₹3.5 lakh and an eligible loan of about ₹2.63 lakh at 75% LTV.
Your inputs
Your inputs
- Gold weight
- 50 g
- Gold rate
- ₹7,000
- Loan-to-value (LTV)
- 75%
- Interest rate
- 10%
- Loan tenure
- 1 yrs
Results
Eligible loan amount
₹2,62,500
At 75% LTV
Monthly EMI
₹23,078
Over 1 yr
Total interest
₹14,435
Paid over the tenure
Gold value
₹3,50,000
50 g pledged
Principal vs interest each year
How each year’s repayment splits between principal and interest.
Year-wise breakdown
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | ₹2,62,500 | ₹14,435 | ₹0 |
Principal and interest repaid each year with the closing balance, assuming a reducing-balance EMI loan.
How the Gold Loan Calculator works
Formula
- Gold value
- Gold weight (g) × current rate per gram
- LTV
- Loan-to-value ratio the lender applies (RBI caps banks at 75%)
- P
- Eligible loan amount (the sanctioned principal)
- r
- Monthly interest rate (annual ÷ 12 ÷ 100)
- n
- Number of monthly instalments
Step-by-step calculation
Worked with the default values.
- 1
Value of pledged gold
50 g × ₹7,000
= ₹3,50,000
- 2
Eligible loan (LTV-capped)
₹3,50,000 × 75%
= ₹2,62,500
- 3
Monthly EMI
P × r × (1+r)ⁿ / ((1+r)ⁿ − 1)
= ₹23,078
- 4
Total interest
EMI × 12 − ₹2,62,500
= ₹14,435
How it works
- The lender values your gold on its net weight and purity, then lends only a capped percentage of that value — the loan-to-value (LTV) ratio.
- RBI limits banks to a maximum 75% LTV on gold loans; the shortfall protects the lender if gold prices fall before the loan is repaid.
- You can repay through a regular EMI, or via bullet/overdraft options where you service only interest and clear the principal at the end.
Examples
50 g of 22K gold at ₹7,000/g, 75% LTV, 10% p.a. for 1 year
Gold value ₹3.5 lakh → eligible loan ≈ ₹2.63 lakh, EMI ≈ ₹23,096, about ₹14,500 total interest.
100 g at ₹7,000/g, 75% LTV, 11% p.a. for 2 years
Gold value ₹7 lakh → eligible loan ≈ ₹5.25 lakh, EMI ≈ ₹24,464, roughly ₹62,000 total interest.
Understanding the Gold Loan Calculator
What a gold loan is
A gold loan is a secured loan where you pledge gold jewellery or coins as collateral and the lender advances cash against it. Because the loan is backed by a liquid, high-value asset, it is quick to arrange, needs little paperwork, and usually carries a much lower interest rate than an unsecured personal loan. Banks, NBFCs and specialised gold-loan companies all offer it.
How much you can borrow — the LTV cap
You cannot borrow the full market value of your gold. Lenders apply a loan-to-value (LTV) ratio — the percentage of the gold’s assessed value they will lend. The RBI caps banks at 75%, so ₹1 lakh of gold gets you up to ₹75,000. The remaining margin protects the lender if gold prices slip before you repay.
Two things drive your eligibility:
- Gold value — weight (in grams) times the current rate per gram, counting only pure gold content, not stones or making charges.
- LTV — the higher the ratio your lender offers, the more loan you get per gram.
Repaying a gold loan
Gold loans are flexible on repayment:
- Regular EMI — equal monthly instalments of principal plus interest, exactly like this calculator models.
- Interest-only / bullet — you service interest during the tenure (or pay it upfront) and clear the principal at maturity.
- Overdraft — a sanctioned limit against your gold on which you pay interest only on the amount drawn.
Because the tenure is short (often under three years), the EMI on a given amount is higher than on a long-term home loan, but the total interest stays modest.
Why the rate is low — and the risks
The security of physical gold is why rates typically sit around 9–15% p.a., well below personal-loan rates. But there are trade-offs. If you default, the lender can auction your gold after due notice. And if gold prices fall sharply mid-tenure, you may face a margin call to pledge more gold or repay part of the loan. Borrow from a regulated lender with insured vault storage, keep your pledge receipt, and aim to redeem your ornaments as early as your cash flow allows.
Pros
- Secured by gold, so interest rates are far lower than unsecured personal loans.
- Fast disbursal — often the same day — with minimal documentation.
- No income proof or credit score usually required, aiding self-employed borrowers.
- Flexible repayment: EMI, interest-only, bullet or overdraft options.
- Your gold is returned intact once the loan is fully repaid.
Cons
- You can borrow only up to the LTV cap (75% for banks), not the full gold value.
- Default risk means the lender can auction your pledged gold to recover dues.
- Short tenures make monthly EMIs relatively high for a given loan amount.
- A sharp fall in gold prices can trigger a margin call to pledge more gold or repay part of the loan.
Tips
- 1Compare the effective LTV and rate across banks and NBFCs — a higher LTV means more loan per gram of gold.
- 2Prefer a regular EMI or interest-servicing plan over bullet repayment to avoid a large lump sum at maturity.
- 3Borrow only what you need; a smaller loan against the same gold gives you a bigger safety buffer against price drops.
- 4Choose a regulated lender with insured storage and read the auction and foreclosure clauses before pledging.
- 5Repay or renew before maturity to avoid penal interest and any risk to your pledged ornaments.
Frequently asked questions
Everything you need to know about the Gold Loan Calculator.
What is LTV in a gold loan?
How is the value of my gold assessed?
Is a gold loan cheaper than a personal loan?
What repayment options are available?
What happens if I cannot repay a gold loan?
Do gold loans need income proof or a credit score?
What is the maximum tenure for a gold loan?
Is my gold safe with the lender?
Are there processing charges on a gold loan?
Can I get 100% of my gold’s value as a loan?
Methodology & sources
How the Gold Loan Calculator is calculated, and where the underlying rules come from.
How we calculate it
Every result is produced by a single, shared and tested financial-formula library used across the whole site — so the maths is consistent from one calculator to the next. Figures are estimates based on the inputs you enter and standard assumptions (such as regular compounding and constant rates); real-world outcomes vary with taxes, fees and changing rates. All calculations run in your browser — nothing you type is stored or sent to a server.
Sources & references
Editorial policy & disclaimer. FinCalcHub provides free educational tools and estimates — not personalised financial, tax or investment advice. Verify important decisions with a qualified professional. Read our editorial approach, disclaimer and privacy policy.
Last reviewed for accuracy on .
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