50 g of 22K gold, 24K at ₹10,000 per gram, 75% LTV, 10%, 12 months
Gold value ₹4,58,333, loan ₹3,43,750, interest ₹34,375, which is ₹2,865 a month.
Gold loan calculator
The lender's loan-to-value limit applies to the gold's market value. Type today's 24K rate. Interest is monthly on a reducing basis if you pay it each month, or compounds monthly if you pay everything at the end. Fees and valuation charges are not included.
grams
karat
10 thousand
%
RBI caps it by loan size; many banks lend up to 75%.
%
months
Interest
Loan you can get
₹3,43,750
75% of ₹4,58,333, the market value of your gold. Interest over 12 months is ₹34,375.
- Gold value
- ₹4,58,333
- Interest
- ₹34,375
- Monthly interest
- ₹2,865
How lenders value your gold and what you can borrow
A gold loan is about the easiest credit to get because the security is already in your hands. The bank weighs the gold, tests its purity, values only the pure gold, and then lends a part of that value.
Here is the sum with simple numbers. 50 grams of 22-karat gold with a 24K rate of ₹10,000 a gram has a pure-gold value of 50 × 10,000 × 22 ÷ 24 = ₹4,58,333. At a 75% loan-to-value, the loan is ₹3,43,750. At 10% a year, 12 months of interest is ₹34,375, or about ₹2,865 a month if you pay it monthly.
Those numbers use an example gold rate. The real figure changes daily, so type today's rate before you decide. Also note that the weight counts only the gold. Stones and enamel are not valued, so a heavy necklace with stones will give less than you expect.
There are two common ways to repay. With monthly interest, you pay interest each month and return the loan at the end, which keeps the cost flat. With bullet repayment you pay everything at the end, and interest compounds, so the total is higher. Always compare the effective cost, and do not forget processing and valuation charges.
Sources
What this calculator does not account for
- Processing, valuation and renewal charges.
- The lender's own deduction for impurities and stones.
- Changes in the gold price during the loan.
How this is calculated
Formula: Loan from the gold's value
value =grams × 24K rate × karat ÷ 24; loan =value × LTVWhat the symbols mean
- karatPurity: 22K gold is 22 ÷ 24 = 91.7% pure.
- LTVLoan-to-value, the share of the gold's value the lender will give.
Good to know
- The 24K rate here is an example default. Type today's rate from a jeweller or your bank.
- Interest paid monthly is simple; at-the-end repayment compounds monthly.
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Worked examples
Each example is worked out by the same code as the calculator above.
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<iframe src="/embed/gold-loan-calculator" title="Gold loan" width="100%" height="720" style="border:0;max-width:42rem" loading="lazy"></iframe>Questions
How much loan can I get on gold?
Up to the lender's LTV, commonly up to 75% of the gold's value. RBI sets the ceiling by loan size, and it is higher for small loans.
Which rate does the lender use?
They value pure gold content using a recent average of the 22K or 24K rate and ignore stones, making charges and any wastage.
Is a gold loan cheaper than a personal loan?
Usually yes, since the gold is security. Rates often sit between 9% and 18%.
What if I cannot repay?
The lender can auction the gold after notice. Repay interest on time, or renew the loan, to avoid that.