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Gold Loan Calculator — Loan Against Gold at 75% LTV

Loan amount EMI inputs
Monthly EMI
₹17,770
Total interest
₹13,237
Total payment
₹2,13,237
Formula 
EMI = P × R × (1+R)ⁿ / ((1+R)ⁿ − 1)

Where P = principal, R = monthly interest rate, n = tenure in months.

Source: RBI Master Circular on Loans against Gold; LTV cap 75%

What is a gold loan?

A gold loan (also called loan against gold or LAG) is a secured short-tenure retail loan against pledged gold ornaments or coins, regulated by RBI under the loan-against-gold framework. The lender retains physical custody of the gold; the borrower pays interest (and repays principal per the chosen schedule) to redeem it.

The headline cap is 75% LTV (Loan-to-Value) on the 30-day average market value of the pledged gold at 22-carat purity. Most lenders disburse within 30 minutes of valuation — making gold loans the fastest secured option in India.

Three repayment structures

StructureMechanicWhen to choose
EMIFixed monthly principal + interest, RBI reducing-balanceTenure 12–36mo; predictable cash flow
BulletPay only interest monthly; full principal at maturityTenure 3–12mo; lump-sum coming (sale, IT refund, salary catch-up)
OverdraftSanctioned limit; draw + repay; interest on used balance onlyRecurring short-term needs; cash-flow management

The calculator above models the EMI option. For bullet, multiply your principal by monthlyRate × tenureMonths to get total interest; principal is paid in full at end.

How much can I borrow per gram?

Maximum loan = (gram weight × 22ct price/gm × purity factor) × 75% LTV cap

Indicative June 2026 figures:

22ct gold rate (₹/gm)Loan per 10g of 22ct
₹6,500/gm₹48,750
₹6,800/gm₹51,000
₹7,000/gm₹52,500

So 100g of 22ct gold typically yields a ₹4.8L–₹5.2L max loan. Lower-purity (18ct, 14ct) jewellery yields proportionally less; the lender will compute purity-adjusted weight.

How is the LTV cap enforced?

RBI’s master circular requires lenders to:

  • Use the 30-day average of the IBJA Mumbai 22ct closing price (not spot)
  • Test purity via touchstone or XRF; reject jewellery with significant non-gold content
  • Cap the loan at 75% of the resulting computed value
  • Reduce LTV proportionally for pledge weight beyond a threshold (usually 50g of gold) at some lenders

Bank vs NBFC

LenderIndicative rateDisbursalBranches
SBI8.50%–11.50%1–3 hrsPan-India
HDFC Bank / ICICI9%–13%1–3 hrsPan-India
Muthoot Finance (NBFC)10%–22%30 min4,500+
Manappuram (NBFC)12%–26%30 min5,000+
IIFL Gold (NBFC)11%–24%30 min2,500+

NBFC rates are higher but their branch density in tier-2/3/4 cities and 30-minute disbursal are unmatched.

Worked examples

Three scenarios at this calculator's defaults.

Scenario EMI Total interest Total payment
Short-term need — ₹1L bullet, 6 months at 11% ₹17,205 ₹3,233 ₹1,03,233
Mid-tenure EMI — ₹3L over 18 months at 12% ₹18,295 ₹29,303 ₹3,29,303
Bank-rate loan — ₹5L over 12 months at 9% ₹43,726 ₹24,709 ₹5,24,709
Related

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Frequently Asked Questions

How is gold loan EMI calculated?
If you choose EMI repayment, the RBI reducing-balance formula applies: EMI = P × R × (1+R)ⁿ / ((1+R)ⁿ − 1). For ₹2L at 12% over 12 months, EMI is ₹17,769. **Bullet repayment** (more common for short-tenure gold loans) — pay only interest monthly and the full principal at maturity. **Overdraft** — interest on used balance only.
What is the LTV cap on gold loans?
RBI caps Loan-to-Value at **75%** of the gold's market value (computed on 30-day average price for gold of 22-carat purity). For 24ct gold, the eligible value is the equivalent 22ct rate × weight. For lower purity (18ct, 14ct), the eligible value is proportionally lower. So ₹100K of 22ct gold gives a maximum loan of ₹75K.
How much loan can I get per gram of gold?
Take the current 22ct gold price per gram (typically published daily — June 2026 indicative ~₹6,800/gm) × 0.75 (LTV cap). So 100g of 22ct gold ≈ ₹6,80,000 market value × 75% = **₹5.10 lakh max loan**. Actual disbursal may be 5%–8% below this after the lender's gold-purity test (touchstone or XRF).
What is the typical gold loan rate?
Banks (SBI, HDFC, ICICI): 8.50%–13%. Specialist NBFCs (Muthoot Finance, Manappuram, IIFL Gold): 10%–26%. Banks lead on rate; NBFCs lead on disbursal speed (often 30 minutes) and branch density. Rates increase materially as LTV approaches the 75% cap — sub-65% LTV often gets the best rate.
What are the repayment options?
Three structures: (1) **EMI** — fixed monthly principal + interest, like a home loan; (2) **Bullet** — interest paid monthly, full principal at maturity; (3) **Overdraft / Cash credit** — drawing line up to sanctioned limit, interest on used balance only. Bullet and overdraft suit short-term needs (3–12 months); EMI suits longer (12–36 months).
How is the gold valued?
RBI mandates the lender use the 30-day average gold price (sourced from India Bullion and Jewellers Association, IBJA, or LBMA) — they cannot use a 'today's price' that may be temporarily inflated. Purity is tested via touchstone (industry standard) or XRF spectrometer. Stones, gems, and the value of jewellery design are excluded; only the gold weight × purity is counted.
What happens if I default on a gold loan?
RBI requires the lender to send 14-day notice before auction. After that, the lender can auction the gold at a public auction and recover the outstanding loan + accrued interest + auction expenses. Surplus (if any) must be refunded to the borrower; deficit becomes a recoverable debt with CIBIL impact.
Should I take a gold loan or a personal loan?
Gold loan if: (1) you have idle gold, (2) you need under ₹5 lakh, (3) you need disbursal in under 24 hours, (4) tenure is under 12 months. Personal loan if: (1) you need over ₹5 lakh, (2) tenure over 12 months, (3) you don't want to risk the gold. Gold loan rates (10%–14%) are typically lower than personal loan rates (12%–22%) for similar credit profiles.
Compliance disclaimer

Loan rates and terms shown are sourced from public bank disclosures; actual rates depend on credit profile, loan amount, and lender underwriting. This page is educational and does not guarantee loan approval or terms.

About this calculator

Reviewed by Jayesh Jain, AMFI Registered Mutual Fund Distributor (ARN-286359 — verify ).

Last reviewed: 2026-05-04

Formula source: RBI Master Circular on Loans against Gold; LTV cap 75%

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