Gold Loan Calculator (India)

About the Gold Loan Calculator (India)

Work out how much a bank or NBFC can lend you on your gold jewellery and coins under the Reserve Bank of India’s rules, and what the loan costs to repay. Enter each piece’s weight, the stones and other parts the assayer deducts, its purity, and the gold rate you can see today. The calculator values the gold the way the RBI tells lenders to — at the rate for its purity, using the lower of the previous day’s closing price and the 30-day average — and applies the loan-to-value (LTV) limit: 85% when your gold loans for personal use come to ₹2.5 lakh or less, 80% up to ₹5 lakh, and 75% above that.

Then choose how you will repay: EMIs, interest every month with the principal at the end, or a bullet loan where principal and interest are paid together at the end — for which the RBI counts the interest due at maturity in the limit, so the same gold raises less. You get the monthly payment, the total interest, the yearly cost with the processing charges, a month-by-month table, and how far the gold price can fall before the loan passes its limit. Switch to How much gold do I need? to see the gold a loan amount needs.

Common uses

• Checking how much a jeweller-tested chain or a set of bangles can raise before you visit a bank or NBFC.
• Comparing an EMI gold loan with a bullet loan for the same need.
• Seeing how far the gold price can fall before the lender asks for more gold or a part payment.
• Working out how much gold to pledge for the amount you need.

How a lender values your gold

The RBI’s directions tell lenders to value gold “based on the reference price corresponding to its actual purity”: the lower of the average closing price of that purity over the preceding 30 days and the closing price of the previous day, as published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange. Where no price is published for the purity, the price of the nearest purity is used and the weight adjusted in proportion — so 22-carat gold priced off a 24-carat rate is net weight × 916 ÷ 999 × the 999 rate. Only the gold counts: “no other cost elements, such as precious stones or gems” are added (RBI Directions).

The lender assays the gold in front of you, deducts the weight of stones, lac, strings and fastenings, and gives you a certificate with the purity, gross and net weight and the value.

The loan-to-value limits

For loans for personal use (consumption loans), the loan may be at most:

• 85% of the gold’s value when your consumption gold loans come to ₹2.5 lakh or less in all;
• 80% above ₹2.5 lakh up to ₹5 lakh;
• 75% above ₹5 lakh.

The limit must hold “on an ongoing basis throughout the tenor of the loan”, so a fall in the gold price can bring a call to repay part of the loan or pledge more gold. For bullet loans, “the LTV calculation, and the amount, shall take into account the total amount repayable at maturity”. These rules apply to banks, co-operative banks and NBFCs, including housing finance companies (RBI Directions; for NBFCs, Chapter IV of their Credit Facilities Directions). For loans for farming or a business, the lender’s own policy sets the limit: type it in.

Other RBI rules for gold loans

• Bullet repayment loans for personal use run for at most 12 months; a lender may renew one only after the interest due is paid.
• One borrower may pledge at most 1 kg of gold ornaments and 50 g of gold coins in all.
• Above ₹2.5 lakh in all, the lender must assess your capacity to repay.
• After you repay, the lender must return the gold the same day and in any case within seven working days, or pay you ₹5,000 for every day of delay it causes.

EMI, interest-only or bullet

• EMI: each payment covers the month’s interest and some principal; the balance falls every month. EMI = P × i ÷ (1 − (1 + i)^−n), with i the yearly rate ÷ 12.
• Interest every month, principal at the end: you pay P × i a month and the whole principal with the last payment.
• Bullet: nothing until the end; then the principal and all the interest — P × (1 + r × months ÷ 12) with simple interest, or P × (1 + i)^n if the lender compounds monthly. The table shows what closing the loan would cost each month.

The yearly cost with charges is the rate at which what you receive (the loan less the processing charges) equals what you pay back, month by month: the internal rate of return × 12, with the effective yearly rate beside it.

Limitations

• There are no live prices here: the result is only as good as the rate you type. Lenders publish the rate and the method they use on their websites.
• Lenders may set lower limits than the RBI’s ceilings, round amounts down, and decide which purities they accept; the calculator shows the most the rules allow.
• Interest is worked out monthly on the balance (or as simple interest on a bullet loan); lenders that charge interest daily, add penal interest after maturity or change the rate during the loan will differ.
• Processing, valuation and other charges are counted as you type them; check the key facts statement of your loan for the full list.
• Silver loans are not covered.

Privacy

Everything is calculated in your browser. The weights, rates and amounts you enter are never uploaded or stored.