Gold Loan Calculator

Most banks and NBFCs offer gold loans at 60% to 80% LTV. The Reserve Bank of India (RBI) caps gold loan LTV at 75% for regulated lenders. Pawn shops may offer 50% to 60% LTV but with faster processing. The LTV is calculated on the gold melt value, not the retail or sentimental value of the jewelry.

Gold loan interest rates range from 7% to 18% per year depending on the lender. Banks offer the lowest rates (7 to 12%), NBFCs charge 12 to 18%, and pawn lenders may charge 18 to 36%. Gold loans have lower interest rates than personal loans because the gold collateral reduces lender risk.

If you default on a gold loan, the lender has the right to auction your pledged gold after a notice period (usually 7 to 15 days). The lender recovers the outstanding principal and interest from the auction proceeds and returns any surplus to you. It is important to renew or repay before the due date to avoid losing your gold.

Yes, most lenders accept gold of 18K and above. Some lenders also accept 14K gold but at a lower valuation. The lender will test the purity of your gold using an XRF machine or acid test. Items with a high stone or gem content may be valued only for their gold weight, excluding the stones.

With a gold loan, you retain ownership of your gold and get it back after repaying the loan with interest. Selling gold means permanent transfer of ownership. Gold loans are ideal when you need short-term funds but expect gold prices to rise or want to keep heirloom jewelry. The downside is you pay interest, whereas selling gives you the full melt value minus dealer margin.