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Indian Finance 🇮🇳

Gold Loan EMI Calculator — Calculations & Slabs for FY 2026-27

Enter your gold weight, purity, and lender's LTV ratio to estimate the maximum loan amount and the monthly EMI at your chosen rate and tenure.

1. Gold & Loan Inputs

Frequently Asked Questions (FAQ)

What is LTV in gold loans and how is it decided?

LTV stands for Loan-to-Value. It is the percentage of the gold's market value that a bank can lend you. The Reserve Bank of India (RBI) caps the maximum LTV for gold loans at 75% for standard schemes, though some promotional or short-term schemes might offer slightly higher limits under special conditions.

Which purity of gold is accepted for a gold loan in India?

Most banks and gold loan companies accept gold with a purity of 18 Karat (18K) to 24 Karat (24K). Gold below 18K purity is generally not accepted. Jewellery with extensive stones or gems is valued only by the net weight of the gold itself.

What happens if I fail to repay my gold loan?

If you default on your gold loan payments, the lender will first send reminders. If the payments remain outstanding after the grace period, the lender has the legal right to auction your pledged gold to recover the principal and outstanding interest.

Is a gold loan better than a personal loan?

Gold loans generally offer lower interest rates (typically 9% to 15%) compared to personal loans (11% to 24%) because they are secured. They also require minimal documentation, have no credit score entry barriers, and offer flexible repayment structures.

Where can I verify the source data for this calculator?

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.

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About This Calculator

Target Audience: Salaried taxpayers, investors & retirees planning Indian tax & wealth growth

💡 What Does This Calculator Do?

This calculator estimates the maximum loan amount you can get against your gold jewellery or coins and calculates the corresponding monthly EMI. It computes the total valuation of your gold based on weight, purity (22K or 18K), and current market rates, helping you plan your borrowing effectively.

📋 How to Use It

  1. 1
    Gold Weight (grams): Enter the net weight of your gold jewellery in grams (excluding stones).
  2. 2
    Gold Purity: Select the purity of your gold (22K or 18K).
  3. 3
    Gold Rate per gram (₹): Enter the current market rate of gold per gram.
  4. 4
    LTV % (Loan-to-Value): Select the percentage of the gold's value you wish to borrow (75%, 80%, or 85%).
  5. 5
    Interest Rate (%): Enter the annual interest rate charged by the lender.
  6. 6
    Tenure (Months): Enter the loan tenure in months (up to 36 months).

🧬 The Logic Explained Simply

  • The Concept: Banks and financial institutions do not lend the full market value of your gold; they apply a margin safety cushion called Loan-to-Value (LTV), capped by RBI at 75% under standard regulations but sometimes higher depending on scheme terms. The gold's purity determines its net weight equivalent to pure gold, which is then valued at current rates.
  • The Formula:
  • Gold Purity Factor: 22K = 0.9167, 18K = 0.75
  • Gold Value = Weight × Gold Rate × Purity Factor
  • Max Loan Amount = Gold Value × (LTV / 100)
  • Monthly EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1], where P = Loan Amount, r = Monthly Interest Rate (Annual Rate / 12 / 100), and n = Tenure in Months.

💡 Real-World Calculation Breakdown

For instance, you pledge 20 grams of 22K gold jewellery:

  • Purity factor = 0.9167
  • Current gold rate = ₹6,200 per gram
  • Gold Valuation = 20g × ₹6,200 × 0.9167 = ₹1,13,671
  • Selected LTV = 75%
  • Max Loan Eligible = ₹1,13,671 × 75% = ₹85,253
  • Selected interest rate = 10.5% per annum (monthly rate = 10.5 / 12 / 100 = 0.00875)
  • Tenure = 12 months
  • Monthly EMI = [₹85,253 × 0.00875 × (1.00875)^12] / [(1.00875)^12 - 1] = ₹7,515 per month
  • Total Amount Paid = ₹7,515 × 12 = ₹90,180
  • Total Interest Cost = ₹90,180 - ₹85,253 = ₹4,927

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