Gold Loan – Quick Loan Against Gold with Low Interest

Gold Loan Calculator — Estimate Loan Amount & EMI

Use this quick calculator to estimate the loan you can get against gold and the EMI for different tenors. Typical LTV (loan-to-value) ranges from 60%–90% depending on lender, purity and market rate. This is an estimate — final amount determined by the lender after verification.

Complete Guide to Gold Loans — Quick Loans Against Gold Jewellery

A gold loan (loan against gold jewellery) is one of the fastest and easiest ways to get short-term finance. Banks, NBFCs and specialised gold loan companies accept gold jewellery as collateral and provide loans at competitive interest rates, often with minimal documentation. Gold loans are ideal for urgent needs — medical emergencies, education fees, business working capital, small home repairs or bridging cash flow gaps.

Why choose a gold loan?

Gold loans offer several advantages:

• Speed: Most lenders disburse within a few hours to 24 hours after verification.
• Minimal documentation: Basic KYC and ownership proof of jewellery is usually sufficient.
• Lower interest than unsecured loans: Because loan is secured, interest rates are typically lower than personal loans or credit cards.
• Flexible tenor and repayment: Short tenors with EMI or bullet repayment options are common.
• Continue ownership: You retain ownership; the lender holds the pledged gold in secure vaults till repayment.

How loan amount is calculated (LTV & purity)

Loan amount depends primarily on three inputs:

1. Gross weight of pledged gold (grams) — the physical weight you submit at the branch.
2. Purity — 24K, 22K, 18K etc. Purity affects the effective gold value.
3. Gold rate per gram — the market rate on the day lender values gold (the rate may be bank’s daily benchmark).

After valuing the gold, lenders apply the Loan-to-Value (LTV) percentage — typically between 60% and 90%. Example: If your pledged gold value is ₹60,000 and LTV is 75%, eligible loan = ₹45,000.

Interest rates & charges

Gold loan interest rates depend on lender and loan tenor — common ranges in 2025 are roughly 7%–15% per annum for banks and NBFCs. Additional charges may include:

• Processing fee (flat or %)
• Valuation charges (rare)
• Storage & insurance (often included by lender)
• Prepayment penalties (check T&C if you plan early closure)

Always compare effective interest rate (EIR) and processing fees — a low headline rate with high fees may be costlier overall.

Repayment options

Common repayment structures:

• EMI (Equated Monthly Installment): Pay principal + interest monthly.
• Interest-only / bullet: Pay interest periodically and principal at maturity — useful for short-term needs if you expect lump-sum inflow later.
• Top-up/renewal: Many lenders allow renewal by paying interest and extending tenor (subject to terms).

Eligibility & documentation

Eligibility criteria are generally easy. Most lenders ask for:

• Valid KYC: Aadhaar, PAN, Voter ID or Passport
• Proof of ownership of jewellery (you bring the jewellery to branch)
• Proof of address (if KYC incomplete)

There is usually no income proof requirement for standard gold loans up to certain limits, making them accessible to self-employed and informal sector borrowers.

Pros & cons — quick summary

Pros: Fast disbursal, low documentation, lower rates vs unsecured loans, flexible tenors.

Cons: Risk of losing jewellery if defaulted, potential storage fees, watch for hidden charges and prepayment rules.

How to get the lowest possible cost

• Shop around — compare bank vs NBFC rates and processing fees.
• Negotiate LTV and processing fees if you have good history with the lender.
• Opt for shorter tenor if you can repay soon — interest cost reduces.
• Pay interest punctually to avoid additional penalties and asset sale risk.

Frequently Asked Questions (FAQs)

Q1: Can I pledge any type of gold jewellery?

Generally yes, but lenders check purity and may deduct making charges or stones’ non-gold weight. Loose gold is not always accepted.

Q2: What happens if I default?

If you default, lender will send reminders and may auction the pledged gold as per regulatory processes after due notices. You lose the jewellery and may face credit consequences.

Q3: Is it better than a personal loan?

For short-term cash needs, gold loans usually cost less and are faster than unsecured personal loans because they are secured. For long-term needs, evaluate total cost and convenience.

Q4: Can I get a top-up on an existing gold loan?

Some lenders provide top-ups or renewal facilities if the existing account is in good standing and sufficient collateral is available.

Practical tips before pledging

• Get an approximate market rate for gold on the day of pledge.
• Understand exactly how LTV and effective interest are calculated.
• Ask about valuation method — gross weight vs net purity adjustment.
• Keep documentation handy to speed up disbursal.

Use the calculator above to simulate scenarios — change gold rate, LTV and tenor to see how loan amount and EMI vary. This helps you pick the best combination for your cash-flow needs and repayment ability.

Disclaimer

This gold loan information and calculator are provided for educational and planning purposes only. Final loan amount, LTV, interest rate and terms are determined by the lender after inspection of the pledged gold and verification. All Finance Store is not responsible for lending decisions or outcomes. For personalized advice and exact pricing, contact a licensed bank or NBFC branch. Always read the lender’s terms and conditions before pledging gold.