Gold Loan EMI Calculator

RBI's Lending Against Gold and Silver Collateral Directions, 2025 (issued June 2025, effective 1 April 2026) replaced the earlier flat 75% cap with a tiered ceiling: 85% for loans up to ₹2.5 lakh, 80% for ₹2.5–5 lakh, and 75% above ₹5 lakh. It applies to every bank, NBFC and co-operative lender — none can legally exceed the tier for your loan size.

The LTV is calculated on the value of the gold alone (gemstones and other ornament components are excluded). For bullet (single-repayment) loans the cap must hold including the interest that accrues over the tenure, and such loans are capped at a 12-month tenure. Some lenders offer a lower LTV at a cheaper rate; if a lender advertises an LTV higher than your tier allows, it is either marketing or a different product.

Regular EMI is the standard reducing-balance loan: a fixed monthly amount covering both principal and interest, fully paid off by the end of the tenure.

Interest-only (overdraft / “EMI free”) means you pay just the monthly interest and repay the full principal as a lump sum at the end. Bullet means you pay nothing each month and settle principal plus all accrued interest in a single payment at maturity. Interest-only and bullet suit short-term needs where a lump sum is expected; RBI caps both at a 12-month tenure.

On a ₹3 lakh loan at 12% for 12 months: regular EMI is about ₹26,655/month; interest-only is about ₹3,000/month interest plus ₹3 lakh at the end; bullet is about ₹3.36 lakh in one final payment.

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 about ₹4.75 lakh when 24K is ₹9,500/g, but the same 50 grams of 18K gold is worth only about ₹3.56 lakh — and because both loans fall in the 80% LTV tier, the eligible loan drops from roughly ₹3.8 lakh to ₹2.85 lakh purely from the purity difference. Most jewellery is 22K (BIS hallmark 916). Hallmarked gold is valued at its stamped purity; unhallmarked gold may be valued lower or rejected. Lenders verify purity with a touchstone or XRF machine at the branch.

If you default, the lender sends reminders and usually 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 its gold-auction policy, typically with at least 14 days' public notice.

Sale proceeds recover the outstanding principal, interest and auction expenses, and any surplus is returned to you; you can redeem the gold any time before the auction by clearing the full dues. To avoid this, pay at least the interest portion every month and contact the lender early — most offer a one-time settlement or extension before auctioning. Under the 2025 RBI rules the lender must also return your gold within 7 working days of full closure.