How this calculator works
Gold loan EMI is calculated on a reducing balance basis, the standard method used for most secured loans in India. The monthly interest rate is derived from your entered annual rate, and the formula spreads your loan amount evenly across equal monthly instalments over your chosen tenure:
EMI = P × r × (1+r)n / ((1+r)n − 1)
where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly instalments (tenure in years × 12). Total payment is EMI × n, and total interest is total payment minus the loan amount.
About gold loans
A gold loan is a secured loan where you pledge your gold jewellery or coins as collateral in exchange for funds. Because the loan is backed by gold, approval is usually fast and doesn't depend heavily on your credit history. Lenders typically cap how much they'll lend against your gold's assessed value — your lender sets a maximum loan-to-value against your gold's assessed value, so check with your specific bank or NBFC for the exact figure that applies to you, since this varies by lender and can change over time.
Interest rates on gold loans vary widely between banks, NBFCs, and lenders — enter your lender's current rate above to get an accurate EMI. Tenures are usually short, commonly ranging from 6 months to 3 years, which is why this calculator defaults to a 2-year tenure.
This tool does not assert any specific loan-to-value percentage — always confirm the maximum amount your lender will offer against your gold's assessed value directly with them, as this varies and can change.
Shunya's CA team handles company registration, tax filings, and ongoing compliance — fully online. This calculator is a free tool and isn't tied to any lending product.
Talk to a CA →How much can I borrow against gold?
Lenders typically cap the loan-to-value against your gold's assessed value. Your lender sets a maximum loan-to-value against your gold's assessed value — check with your specific bank or NBFC for the exact figure and how they value your gold, since this varies by lender and can change over time.
Are gold loan tenures usually short?
Yes, commonly 6 months to 3 years. Gold loans are typically shorter-tenure than home or car loans, which is why the default tenure in this calculator is set to 2 years.
What happens if I can't repay?
The lender can auction the pledged gold to recover the outstanding amount. This is a real risk with gold loans since the loan is directly secured against your gold — make sure your EMI is genuinely affordable before borrowing.
How is gold loan EMI calculated?
Gold loan EMI uses the standard reducing-balance loan formula: EMI = P × r × (1+r)n / ((1+r)n − 1), where P is the loan amount, r is the monthly interest rate, and n is the number of monthly instalments. This calculator applies that formula to whatever amount, rate, and tenure you enter.
Can I prepay or foreclose a gold loan early?
Most gold loans allow prepayment or foreclosure, sometimes with a small charge depending on the lender — this reduces your total interest since you stop paying interest on the outstanding principal early. This calculator doesn't model partial prepayment scenarios, only the full scheduled tenure.
This tool is for quick estimation only and is not a substitute for professional financial or tax advice. For your specific situation, consult a practicing CA or your lender directly.
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