Gold Loan EMI Calculation Guide: How to Calculate Interest, LTV & Prepayment in 2026

Learn how gold loan EMIs work, RBI 75% LTV rules, per-gram gold rates, and how to calculate monthly interest and bullet repayments.

Gold loans are one of the fastest and most accessible borrowing options in India, offered by top lenders like Muthoot Finance, Manappuram, SBI, and HDFC Bank. However, understanding how much loan you can get against your gold jewelry and how your monthly EMI is calculated is key to saving thousands in interest.

Use our Gold Loan EMI Calculator to instantly calculate your eligible loan amount, monthly interest, and repayment schedules.

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1. How Gold Loan Eligibility is Calculated

Your maximum gold loan amount depends on three main variables: 1. Weight of Gold (Grams): Only the net weight of pure gold is considered (excluding gemstones and stones). 2. Purity (Carats): 24K (99.9%), 22K (91.6%), 18K (75.0%). Higher purity yields higher loan amounts per gram. 3. RBI Loan-to-Value (LTV) Limit: The Reserve Bank of India (RBI) caps the maximum loan at 75% of the market value of the pledged gold.

Formula: $$\text{Max Loan Eligibility} = \text{Weight (g)} \times \text{Market Rate per Gram} \times \text{Purity Factor} \times \text{LTV \%}$$

For example, if you pledge 50 grams of 22K gold at a market rate of ₹7,500/g with a 75% LTV: - Total Gold Value = $50 \times (7,500 \times 0.916) = ₹343,500$ - Max Loan Amount = $343,500 \times 0.75 = ₹257,625$

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2. Types of Gold Loan Repayment Options

Unlike traditional home or personal loans, gold loans offer flexible repayment structures:

Scheme Type	How It Works	Best For
Standard Monthly EMI	Equal monthly installments covering both Principal + Interest	Borrowers wanting predictable monthly budgeting
Interest-Only Repayment	Pay interest every month; principal repaid in full at maturity	Short-term liquidity needs with low monthly burden
Bullet Repayment	Pay principal and total interest together in one final payment at maturity	Short 3 to 6 month emergency funding

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3. Top Tips to Get the Best Gold Loan Rate

Compare Interest Rates: NBFCs and banks offer rates ranging from 8.5% to 16% p.a.
Check Valuation Charges: Ensure the lender doesn't charge excessive processing or gold purity testing fees.
Prepay Whenever Possible: Part-prepaying your loan reduces the outstanding principal and overall interest burden.

Calculate your exact loan eligibility and download your full repayment schedule using the ToolPixa Gold Loan EMI Calculator today!

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