Gold Loan Calculator
Key Takeaway
Gold loans offer the lowest interest rates (7–12%) among secured loans in India because gold is highly liquid collateral. LTV (Loan to Value) is capped at 75% by RBI , meaning ₹10 lakh gold gets you max ₹7.5 lakh.
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:
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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)
The Hidden Math of Gold Loan Valuation
When Anjali needed ₹3 Lakhs for a sudden medical emergency, she walked into her local bank with a heavy pouch of family jewelry. The bank manager weighed her gold and said, "We can offer you a loan of ₹2,40,000 at 10% interest."
Anjali was confused. She knew the market rate for gold was ₹7,200 per gram that morning. According to her mental gold loan calculator, her 50 grams of 22K gold should easily be worth over ₹3.3 Lakhs. Why was the bank offering so much less?
This is the secret every borrower needs to know: No bank will ever give you 100% of your gold's market value. The Reserve Bank of India (RBI) mandates a maximum Loan-To-Value (LTV) ratio of 75%. This means the absolute maximum gold loan amount you can get is 75% of its appraised value.
But here is where banks make their real money: the gold loan valuation process. Banks don't calculate your loan based on the 24K pure gold rate you see on the news. They discount the weight of stones, impurities, and calculate the price strictly based on the 22K or 18K purity of your specific ornament. If you want to know the true gold loan value per gram, you must multiply the current 24K rate by your gold's purity percentage, and *then* apply the 75% LTV.
Don't let the bank dictate your net worth. Use the calculator above to find out exactly how much your jewelry is worth before you walk into the branch, and compare different lenders to ensure you aren't being shortchanged on the valuation.
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.
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