How to Calculate Gold Loan EMI

Want to calculate the gold loan emi? Know all about gold loan calculator & how to use it for calculating in simple & easy way.

19 Sep,2022 11:21 IST 45 Views
How to Calculate Gold Loan EMI

Gold loans have helped people to resolve their immediate financial requirements for decades. Furthermore, In India, people are ardent gold purchasers. While it has sentimental value for many, gold reserves are a perfect solution through gold loans for financial constraints people may face.

Banks and non-banking financial institutions offer gold loans at relatively lower interest rates than any unsecured loan. Therefore, people with gold possessions prefer gold loans over other loan types.

While taking a gold loan, you must ascertain the amount needed and consequently pledge the gold as collateral. There are gold loan calculators to help borrowers confirm the gold value. The financial institution then finalizes the EMI schedule. However, other payment options are available, making it flexible for borrowers to repay the entire loan amount.

This blog focuses on how you can determine your gold loan amount and the right way to calculate your gold loan EMI.

How To Evaluate The Loan Amount?

Banks or non-banking financial institutions offering gold loans usually have a gold loan EMI calculator on their website. Here is the step-by-step process of evaluating your loan amount through the gold loan calculator.

Step 1: Enter the appropriate number under "weight of gold."
Step 2: Click on "Evaluate Gold Loan Amount."
Step 3: The calculator will display the amount you qualify for concerning gold weight.

How To Calculate The EMI On A gold loan?

The EMI calculator for gold loans is also easily available on the bank’s or non-banking financial institution’s website. Here is the step-by-step procedure for calculating gold EMI.

Step 1: Enter the desired gold weight to determine the loan amount.
Step 2: Set the preferred interest rate using the slider.
Step 3: Complete the tenure field, indicating the duration you intend to take to repay the loan.
Step 4: Decide the repayment frequency, such as monthly, bimonthly, half-yearly, etc.
Step 5:The specifics of the loan you are eligible for will be reflected in the columns stating EMI, eligible loan amount, and total interest.
Step 6: Click on "Apply Loan" to proceed.

Gold Loan Eligibility

Unlike other loans, gold loans do not require the borrower's credit score, age, financial condition, employment status, and the multiple factors associated with traditional loans. Instead, the gold loans rely on the pledged gold, categorizing them under secured loans.

The loan amount is calculated on the purity and weight of the gold. Thus, the loan amount is solely based on the borrower's desired weight of the gold to pledge and its purity. Ideally, financial institutions can offer up to 90% of the value of the gold as a loan. However, before applying for a gold loan, you must check with your desired lender for the Loan to Value (LTV) ratio.


Q1. Is the gold loan EMI calculator accurate?
Ans. The gold loan EMI calculator calculates based on the weight of gold entered. However, the bank conducts a purity check to ascertain the value correctly. Thus, there could be a minor difference in the loan amount and, consequently, in the EMI.

Q2. What is the rate of interest charged for gold loans?
Ans. The interest rate is generally between 10-27% per annum on gold loans. However, it varies from one lender to another.

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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