Professional tool to compute loan eligibility, EMI, interest cost, and repayment schedule for gold-backed loans. Get instant results with live gold price integration.
RBI mandates maximum 75% Loan-to-Value ratio for gold loans. Higher LTV means higher loan but also higher risk.
Based on current market price
75% LTV of gold value
For selected tenure
Over loan period
Key Insight: Gold loans typically have lower interest rates than personal loans (avg. 11.5% vs 15.5%) due to secured nature. However, default risk involves gold auction.
| Month | EMI (₹) | Principal (₹) | Interest (₹) | Balance (₹) |
|---|
Gold loans represent a significant segment of India's credit market, with over ₹6.5 lakh crore in outstanding loans as of 2026. This secured borrowing option allows individuals to leverage their gold assets for immediate liquidity while retaining ownership. The Reserve Bank of India (RBI) has established clear guidelines to regulate this market, ensuring consumer protection while maintaining financial system stability.
Unlike simple commodity pricing, gold loan valuation follows a meticulous process:
Gold Value = Weight (g) × Purity Factor × Market Price (₹/g)
Where Purity Factor = Karat/24 (e.g., 22K = 22/24 = 0.9166)
Maximum Loan Amount = Gold Value × LTV Ratio (max 0.75)
EMI Calculation (Reducing Balance Method):
EMI = [P × R × (1+R)^N] / [(1+R)^N - 1]
Where: P = Principal, R = Monthly Interest Rate (annual rate ÷ 12 ÷ 100), N = Tenure in months
Situation: Mr. Sharma required ₹3,00,000 immediately for an urgent cardiac procedure. With a limited credit history but 200g of family gold jewellery (22K), he explored gold loan options.
Calculation: Gold value = 200g × 0.9166 × ₹6,250/g = ₹11,45,750. Maximum loan eligibility at 75% LTV = ₹8,59,312.
Decision: Opted for ₹3,00,000 loan at 11.5% interest for 18 months. EMI calculated at ₹18,742/month.
Outcome: Received disbursement within 2 hours, completed medical procedure, and repaid loan in 15 months via partial prepayments, saving ₹8,420 in interest.
The gold loan landscape in 2026 presents both opportunities and considerations:
Cost Comparison (₹3,00,000 loan for 24 months):
Gold loans offer optimal balance of speed, cost, and convenience for emergency funding needs.
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Disclaimer: This calculator provides estimates based on standard formulas and current market conditions. Actual loan terms may vary based on lender policies, gold appraisal, and individual circumstances. Gold prices fluctuate continuously - final valuation determined at time of physical verification. Always read loan agreement thoroughly before signing. Interest rates shown are indicative for 2026.