Gold loan eligibility and EMI.
Eligible loan amount
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Monthly EMI
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Gold value
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Your breakdown
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What you can borrow against your gold
A gold loan is a secured loan where your jewellery or coins sit with the lender as collateral. How much you get depends on three things: the weight of the gold, its purity, and the day’s gold rate. The lender values only the gold content, so the making charges and any stones in your jewellery are stripped out before valuation. On top of that sits a hard ceiling. The Reserve Bank of India caps the loan-to-value on gold loans at 75 percent. So whatever your gold is worth, you cannot borrow more than three-quarters of it from a bank or NBFC. That buffer protects the lender if gold prices dip during the loan term.
This is the fastest large loan available to most households. There is no income proof, no salary slip, no CIBIL gymnastics. Walk in with gold and walk out with money the same day, often within an hour. That speed is exactly why it suits a genuine short-term crunch, a medical bill, a business payment, a gap before a salary lands.
How the eligible amount and EMI are built
The calculator first values your gold as weight times the per-gram rate, then applies your chosen LTV (capped at 75 percent) to get the eligible loan. The EMI then uses the standard reducing-balance formula on that loan over your chosen tenure. Gold-loan tenures are short by design, usually three to thirty-six months, because the lender does not want to hold your collateral against a volatile asset for years.
A worked example: 50 grams at 75 percent LTV
Take 50 grams of 22-carat gold at a rate of Rs 6,500 a gram, borrowed at the full 75 percent LTV, with interest at 11 percent a year over 12 months.
So gold worth Rs 3.25 lakh fetches a Rs 2.43 lakh loan, and the year of interest is under Rs 15,000. That interest rate, around 11 percent, is far below the 16 to 24 percent a personal loan or credit card would charge, which is the real argument for a gold loan over unsecured borrowing.
Repayment options you should know
Gold loans are unusually flexible on how you pay back. Beyond a regular EMI, lenders offer a bullet plan where you pay nothing during the term and clear the entire principal plus interest at maturity, an interest-only plan where you service just the interest monthly and repay the principal at the end, and overdraft-style facilities where you draw and repay against your gold limit and pay interest only on what you use. If your need is a short bridge, a bullet or interest-only plan keeps your monthly outflow low. Pick the structure that matches when your money is actually coming back.
The risk nobody mentions at the counter
The flip side of no income check is that your gold is genuinely at stake. If you default, the lender can auction it after due notice, and if gold prices have fallen, you may not even recover the difference. Be wary too of loans pushed at very high LTV: the closer you borrow to the 75 percent cap, the smaller the cushion, and a price dip can trigger a margin call asking you to top up. My advice is to borrow comfortably below the cap if you can, and to favour a regulated bank or large NBFC over an unbranded local lender whose auction practices and charges may be opaque.
Why does the loan use the 22-carat rate when my jewellery is 22-carat?
Lenders value the actual gold content. Most Indian jewellery is 22-carat, which is about 91.6 percent pure, so the per-gram rate already reflects that purity. If you pledge 18-carat items, the per-gram value is lower because there is less gold in each gram. Coins and bars of 24-carat fetch the highest per-gram value.
Is there tax benefit on gold-loan interest?
Only if you use the money for a purpose that itself allows a deduction. Interest on a gold loan taken to fund a business is deductible as a business expense, and interest on one used to buy or build a house can qualify under the home-loan interest provisions. A gold loan taken for personal consumption gives no tax benefit, the interest is simply a cost.