Gold Loan Calculator
Gold Loan Calculator
How much you can borrow against gold jewellery and what it costs: the gold’s value, the lender’s loan-to-value, India’s RBI caps by loan size, and the interest on an EMI, interest-only or bullet loan.
Gold loan amount
40 g of 22K (916) gold at a 24K rate of $15,000 a gram; lender’s LTV 75%; 10% a year; 12-month bullet loan
The loan and its interest
- RBI cap
- the largest loan L with L × F ≤ tier(L) × V: tier 85% up to ₹2.5 lakh, 80% up to ₹5 lakh, 75% above; F = (1 + r)m for a bullet loan (the whole amount due at maturity counts), 1 otherwise
- r
- the monthly rate: annual rate ÷ 12 ÷ 100
- m
- the tenure in months
- interest
- EMI loan: EMI × m − Loan. Interest paid monthly: Loan × r × m (no compounding, because it is paid as it falls due). Bullet: compounded at monthly rests and paid at the end.
Worked example
40 g of 22K (916) gold at a 24K rate of $15,000 a gram; lender's LTV 75%; 10% a year; 12-month bullet loan
Value = 40 × 15,000 × 0.916 = $5,49,600; the lender's 75% is $4,12,200
Bullet: the amount due is the loan × (1 + 10 ÷ 1200)12 = loan × 1.10471
RBI tier for a loan between ₹2.5 and ₹5 lakh: 80%, applied to the amount due, so loan ≤ 0.80 × 5,49,600 ÷ 1.10471 = $3,98,004
Loan = the lesser of 4,12,200 and 3,98,004 = $3,98,004
Due after 12 months: $4,39,680, of which interest $41,676
The same gold on a 12-month EMI: $4,12,200 at $36,239 a month, $22,667 interest
Largest loan on 22K gold at 15,000 a gram (24K), lender LTV 85%, 10%, 12 months
| Gold | EMI loan | Bullet loan |
|---|---|---|
| 10 g | $1,16,790 | $1,05,720 |
| 20 g | $2,33,580 | $2,11,440 |
| 40 g | $4,39,680 | $3,98,004 |
| 80 g | $8,24,400 | $7,46,257 |
How much a gold loan gives, and what it costs
A lender values the gold content of your jewellery — not the stones, not the making charges — at a reference rate for its purity, and lends a share of that value: the loan-to-value, or LTV. Here the value is the weight × the 24K rate × the fineness ÷ 1000, the same convention as the gold price calculator. In India the Reserve Bank’s gold-lending Directions, in force from 1 April 2026, set the reference rate as the lower of the 30-day average and the previous day’s closing price, and cap the LTV on loans for consumption by the total you borrow from that lender: 85% up to ₹2.5 lakh, 80% up to ₹5 lakh, 75% above.
The bullet rule is where most calculators go wrong. A bullet loan is one where principal and interest are both paid at the end. RBI counts the whole amount repayable at maturity against the LTV, not just the amount lent, and caps such consumption loans at 12 months, renewable. So on the same gold a bullet loan must be smaller: in the example, $3,98,004 instead of the $4,12,200 the lender’s 75% would give, because after a year at 10% the amount due is 80% of the gold’s value, the ceiling for a loan of that size. Lenders reflect this by quoting lower per-gram rates for bullet schemes.
How interest is charged. Banks and gold-loan companies generally charge interest at monthly rests — Bank of Maharashtra’s bullet scheme charges interest to the account monthly but collects it only at maturity, and Muthoot Finance’s policy says interest is compounded monthly — so unpaid interest earns interest. Paying the interest every month and the principal at the end avoids that compounding; the total is then simple interest, and the loan is no longer a bullet loan for RBI’s cap. An EMI loan repays principal as it goes and costs least. Some lenders cut the rate if interest is paid on time and raise it if not; check the Key Facts Statement.
Risks worth knowing. If the gold price falls, the LTV rises and the lender can ask for money or more gold; if a loan is not repaid, the lender can auction the pledged gold after notice. The RBI tiers are in rupees and apply to Indian lenders; elsewhere use the lender’s figure alone by switching the RBI option off. To value jewellery you are buying rather than pledging, use the gold jewellery price calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
What is the RBI LTV limit for gold loans?
For loans for consumption, from 1 April 2026: 85% of the gold’s value if your total such loans are up to ₹2.5 lakh, 80% above ₹2.5 lakh up to ₹5 lakh, and 75% above ₹5 lakh (RBI Lending Against Gold and Silver Collateral Directions, 2025). For bullet loans the amount due at maturity, interest included, is counted.
Why do I get less on a bullet gold loan?
Because the interest that will be due at the end counts against the cap. In the example the bullet loan is $3,98,004, against $4,12,200 on an EMI loan on the same gold.
Is gold loan interest simple or compound?
Lenders generally charge it at monthly rests, which compounds if you do not pay it. If you pay the interest every month, you pay simple interest on the principal. Your Key Facts Statement states the method.
How is my gold valued for a loan?
On the gold content only, at a reference price for its purity. In India that is the lower of the 30-day average and the previous day’s closing price published by the India Bullion and Jewellers Association or a SEBI-regulated commodity exchange.
What is the maximum tenure of a bullet gold loan?
12 months for loans for consumption under RBI’s Directions, which can be renewed.
Related calculators
References
- Reserve Bank of India. Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025. RBI/2025-26/47, 6 June 2025 (amended 29 September 2025), in force from 1 April 2026; since carried into the Credit Facilities Directions of 28 November 2025 for each type of lender (for example Commercial Banks, RBI/DOR/2025-26/154). Consumption-loan LTV by total loan per borrower: up to ₹2.5 lakh 85%, above ₹2.5 lakh to ₹5 lakh 80%, above ₹5 lakh 75%; for bullet loans the LTV counts the total amount repayable at maturity; bullet consumption loans capped at 12 months; LTV to be maintained throughout; valuation at the lower of the 30-day average and the previous day’s closing price for the actual purity.
- Bank of Maharashtra. Gold Loan (web page, consulted September 2026): bullet repayment of interest and principal at the end of a term of up to 12 months; interest “charged to the account at monthly rests but will become due for payment along with Principal only at maturity”. Cited for the convention only.
- Muthoot Finance. Interest Rate Policy (web page, consulted September 2026): gold-loan interest is “calculated at monthly compounding basis” for the actual days the loan is outstanding. Cited for the convention only.
- Reserve Bank of India. Key Facts Statement (KFS) for Loans & Advances. RBI/2024-25/18, DOR.STR.REC.13/13.03.00/2024-25, 15 April 2024: lenders must give a KFS with the annual percentage rate, all charges and the repayment schedule for retail and MSME term loans.
- Brealey RA, Myers SC, Allen F. Principles of Corporate Finance. McGraw-Hill. The present value of an annuity, from which the level-payment loan formula, its schedule and its inverse follow.