Gold Loan EMI Calculator

Yes. RBI's Master Direction on Loans against Gold Ornaments and Jewellery (DBR.Dir.No.85/13.03.00/2015-16) caps the LTV at 75% for both banks and non-banking financial companies (NBFCs). No lender — Muthoot, Manappuram, SBI, HDFC, ICICI, or any other — can legally exceed this cap.

The cap is calculated on the value of gold alone (gemstones, beads, and other ornament components are excluded). Some lenders offer lower LTVs (60-70%) at lower interest rates as a risk-adjusted product. If a lender advertises “up to 90% LTV”, it is either a marketing exaggeration or refers to a different product (e.g. loan against gold ETF units, which has separate rules).

Regular EMI is the standard reducing-balance loan: every month you pay a fixed amount that includes both principal and interest, and the loan is fully paid off at the end of the tenure.

Overdraft (also called “EMI Free” or “bullet repayment”) means you only pay the monthly interest each month and repay the full principal as a lumpsum at the end of the tenure. Overdraft suits short-term needs (3-12 months) where you expect a lumpsum inflow at the end — the monthly outflow is much lower, but the total interest is higher than a comparable EMI loan because the principal stays at face value all the way to the end.

On a ₹3,26,562 loan at 11% for 12 months, regular EMI is about ₹28,862/month (total ₹3,46,346); overdraft is about ₹2,993/month interest plus ₹3,26,562 lumpsum at the end (total ₹3,62,475).

Yes, directly and significantly. The lender values your gold at the per-gram rate of pure 24K gold, multiplied by the purity factor: 24K = 1.00, 22K = 0.9167, 18K = 0.75.

So 50 grams of 24K gold is worth roughly ₹4,75,000 when 24K is ₹9,500/g, but the same 50 grams of 18K gold is worth only ₹3,56,250 — and the eligible loan (75% LTV) drops from ₹3,56,250 to ₹2,67,188 just from the purity difference. Most jewellery is 22K (the most common ornament caratage). Hallmarked gold is valued at its stamped purity (BIS hallmark shows 22K916, 18K750, etc.); unhallmarked gold may be valued lower or rejected outright. Lenders verify purity with a touchstone or XRF machine at the branch, so the loan offer can vary from your expectation if the actual purity is lower than estimated.

If you default, the lender sends multiple reminders and offers options like tenure extension, restructuring, or partial payment of overdue interest. If non-payment continues for 90 days (the standard non-performing-asset threshold), the lender issues a final notice and proceeds to auction the pledged gold under the SARFAESI Act and the lender's gold-auction policy.

The auction is typically held publicly with at least 14 days' notice; sale proceeds are used to recover the outstanding principal + interest + auction expenses, and any surplus is returned to the borrower. The borrower can redeem the gold any time before the auction is conducted by clearing the full outstanding amount.

To avoid this: pay at least the interest portion every month even if you can't pay the principal, and contact the lender early if you anticipate trouble — most lenders offer one-time settlement or tenure extension before resorting to auction.