Gold Loan Calculator
Gold Loan Valuation Summary:
- Estimated gold jewelry market value: ₹3,30,000.
- Maximum eligible loan amount (75% LTV): ₹2,47,500.
- Monthly interest payments (simple interest): ₹1,959/month.
- Total interest payable over 12 months: ₹23,512.
What to do next
Based on your Gold Loan Calculator, here are the tools you should try next:
Advertisement
Gold Loan Purity Value Formula
Determines eligible loan limits against gold jewelry based on weight, carat purity, and maximum regulatory LTV (75%).
Worked Example: 50 grams of 22k gold jewelry at ₹7,000/gram gold rate (75% LTV)
Gold Loans: Utilizing gold jewelry for low-cost emergency funding
Suresh needed ₹2 Lakhs for a business project. Instead of taking a high-interest personal loan, he decided to pledge 50 grams of 22k gold jewelry at his bank. The gold rate was ₹7,000 per gram.
His jewelry's market value was ₹3,20,833. With a 75% LTV limit, his eligible gold loan was ₹2,40,625. He chose a monthly simple interest repayment plan at 9% p.a., paying just ₹1,805 in interest monthly. This option was much cheaper than a 15% personal loan.
Gold loans are secured against physical gold, offering quick processing and lower interest rates. The loan amount is determined by the gold's weight and purity.
Use gold loans for short-term liquidity needs. Repay the interest regularly to avoid gold auction risks, and monitor LTV margins during gold market crashes.
Frequently Asked Questions
What is LTV in gold loans?
LTV stands for Loan-to-Value. The Reserve Bank of India (RBI) restricts gold loan LTV to a maximum of 75%, meaning you can borrow up to 75% of your pledged gold's market value.
How is gold loan interest calculated?
Unlike EMIs, gold loans often offer flexible repayment options like bullet repayments (principal + simple interest paid at the end of tenure) or monthly interest-only payments.
What happens if I fail to repay a gold loan?
If you default on payments, the lender has the legal right to auction your pledged gold jewelry to recover the outstanding loan balance and accumulated interest.
Get Smarter With Money Every Week
Join 10,000+ readers. One actionable money tip delivered free every Sunday.
Was this calculator helpful?
Advertisement