Use this Gold Loan Calculator to estimate how much you may be able to borrow against your gold jewellery. Enter the weight, purity and gold price to calculate its estimated value. You can then check the possible loan amount, interest cost and repayment amount using the selected repayment method.
How Does a Gold Loan Calculator Work?
A gold loan calculator estimates the amount you may receive by pledging eligible gold jewellery, ornaments or coins with a lender. It uses the gold’s weight, purity, price and applicable loan-to-value ratio to estimate the loan amount.
After estimating the eligible loan amount, the calculator uses the interest rate and repayment period to work out the monthly EMI or the amount payable at maturity, depending on the repayment method selected.
RBI Gold Loan LTV Rules
The Reserve Bank of India introduced a tiered maximum LTV structure for consumption loans against eligible gold and silver collateral. Regulated lenders were required to comply with the revised directions no later than April 1, 2026.
| Total Consumption Loan Amount per Borrower | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| Above ₹2.5 lakh and up to ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
These are maximum regulatory limits, not guaranteed loan offers. A lender may offer a lower LTV based on its credit policy and assessment of the pledged gold.
The calculator checks the possible loan amount across the applicable tiers instead of simply applying 85% to every gold valuation. This matters because the LTV percentage changes when the total consumption loan amount crosses the prescribed thresholds.
How Is the Maximum Loan Amount Calculated?
The calculator first estimates the value of the eligible gold using the weight and rate entered. It then checks the maximum loan amount possible under each LTV tier and selects the highest amount that satisfies the applicable tier limit.
For bullet repayment loans, the LTV calculation must also account for the total amount repayable at maturity. Therefore, the principal amount available may be lower than the amount calculated for a regular EMI loan.
How Is Gold Value Determined for a Gold Loan?
The value of gold depends on its net weight and purity. A lender does not necessarily use the retail jewellery price or the rate displayed by a jewellery shop.
Under RBI’s directions, the reference price must correspond to the actual purity of the gold. The lender uses the lower of the average closing price for the preceding 30 days or the closing price on the preceding day, as published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange.
Only the intrinsic value of the gold content is considered. Making charges, precious stones and gems are not added to the gold’s collateral value. The lender also checks the net gold weight after accounting for stones, fastenings and other non-gold components.
Regular EMI vs Bullet Repayment
Regular EMI Repayment
Under the regular EMI method, the borrower repays the principal and interest through monthly instalments. Each payment reduces the outstanding principal, so the interest component generally decreases over the repayment period.
Bullet Repayment
Under a bullet repayment loan, both the principal and interest are due at maturity. The borrower does not repay the principal through regular monthly EMIs. RBI’s directions cap the tenure of consumption loans structured as bullet repayment loans at 12 months, subject to the applicable renewal provisions.
For illustration, this calculator uses simple interest to estimate the maturity amount. A lender’s actual calculation may differ depending on its loan agreement and interest calculation method.
What Can Affect Your Gold Loan Amount?
Gold Purity
Higher-purity gold generally has a higher intrinsic gold value for the same net weight. Jewellery marked 22K, 20K or 18K may receive different valuations depending on the actual purity established during the lender’s assessment.
Net Gold Weight
The gross weight of jewellery may include stones, lac, strings, fastenings and other materials. Lenders assess the net gold content rather than treating the entire jewellery weight as pure gold.
Applicable LTV Limit
The maximum loan amount depends on the applicable LTV category. The lender may sanction less than the regulatory maximum after considering its valuation and lending policy.
Interest Rate and Loan Tenure
The interest rate and repayment period determine the cost of borrowing. A higher interest rate or longer repayment period can increase the total interest payable. Compare the complete repayment terms and charges before accepting a loan.
Important Things to Check Before Taking a Gold Loan
- Compare the interest rate and repayment method offered by different regulated lenders.
- Check the processing fee, valuation charges and other applicable costs in the Key Fact Statement and loan agreement.
- Understand the repayment due dates and the consequences of missing payments.
- Ask the lender to explain its gold valuation and net-weight assessment.
- Keep the gold assay certificate and loan documents safely.
- Understand the lender’s auction procedure in case of default.
Return of Pledged Gold After Loan Closure
RBI’s directions require lenders to release or return pledged gold and silver collateral on the same day after full repayment or settlement of the loan, and in any case within a maximum of seven working days.
If a delay beyond this period is attributable to the lender, the lender must compensate the borrower at ₹5,000 for each day of delay. The borrower should check the collateral details against the assay certificate when the gold is returned.
Frequently Asked Questions
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