# How To Calculate Gold Loan EMI

The Equated Monthly Installments schedule is the most popular repayment system for gold loan. Read on to know how to calculate gold loan EMI at IIFL finance.

8 Oct, 2022 15:44 IST 694

Indians cherish the possession of gold and use it during auspicious occasions. Almost every Indian household stores a modest amount of gold in the locker. The yellow metal is more than just a pricey item gifted to them by their elders or passed down from their ancestors. Gold possession is the saviour during an urgent economic crunch.

Gold-based loans have existed for the longest time. However, they weren't the safest as there were no governing bodies, and people lost their assets. Later, banks started giving gold loans with the security that the borrower would receive their assets after completing the tenure. Non-Banking Financial Corporations (NBFCs) have also entered the picture and offer competitive interest rates on gold loans.

Gold loans offer several repayment systems, such as the bullet system, partial payment system, and others. The Equated Monthly Installments (EMI) schedule is the most popular repayment system. Let's examine how to calculate EMI for a gold loan.

## What Is A Gold Loan EMI?

EMI or Equated Monthly Installment is the payment system where the borrower has to pay a certain amount in a uniform monthly format. The monthly installments include a sum of principal and interest amount.

It is the most common repayment pattern as it helps borrowers manage funds better. The bank or NBFCs set the EMI schedule. In gold loans, the borrower can choose other payment options too. In the same EMI format, the borrower can pick to pay only the interest amount and repay the principal at the end of the loan tenure.

## How To Calculate EMI For A Gold Loan?

The gold loan EMIs include the principal and interest amount. However, mathematically, the formula to calculate gold loan EMI is much more complex.

A = P x R x [(1+R)n / {(1+R)n -1}]

Here, A represents equated monthly installments, P represents the principal amount, R represents the interest rate, and n represents time or total tenure.

The formula will help you determine the gold loan EMI manually. However, there may be errors in determining the amount without a gold EMI calculator. An EMI calculator on a gold loan can help you predict a more accurate result. Therefore, most lenders have gold loan EMI calculator online. Additionally, several websites can help calculate gold loan EMIs. The bank where you plan to take the loan will also help you understand the EMI calculation.

## What Are The Factors Influencing The Gold Loan EMI?

The factors that affect the gold loan EMI calculation are as follows.

### 1. Loan Amount

The loan amount relies on the requirement or the quantity of gold the borrower pledges. Therefore, the EMI will be proportionately more if you want a bigger loan.

### 2. Loan Tenure

The loan tenure is another crucial factor affecting the gold loan EMI. If you have taken a loan for a short tenure, the EMI will be relatively less than a smaller loan for a longer tenure.

### 3. Rate Of Interest

The gold loan rate of interest primarily affects the EMI. Some banks and NBFCs offer competitive rates. Therefore, going through a top gold loan financial institution, like IIFL Finance, is essential.

### 4. Collateral

You can reduce the interest by adding more collateral. Consequently, the reduced interest rate can reduce the total amount due for repayment.

## Calculate Your EMIs And Apply For A Gold Loan With IIFL Finance

IIFL Finance offers gold loan involving minimal paperwork. IIFL offers affordable interest rates and adaptable repayment arrangements for short-term gold loans. Additionally, we guarantee the security of your collateralised physical gold until you make the necessary repayment.

A gold loan has never been simpler to obtain! Simply walk into one of our branches in India, complete an e-KYC form, and receive loan approval in less than 30 minutes.

## FAQs

Q1. Which does not qualify for a gold loan?
Ans. For gold loans, banks do not consider jewels or any other metal alloy as a part of the eligible loan amount. You can get a gold loan against gold coins or any other pure gold item if they are 99.99% pure and under 50 g in weight.

Q2. How frequently can I take the gold loan?
Ans. When you have fully repaid the loan amount, you meet the requirements for a gold loan and are eligible to recover the same gold for use in the future. Any type of gold, including ornaments made of gold, can be mortgaged endlessly.

##### Get Gold Loan at the comfort of your home

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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