Gold Loan EMI Calculator

A gold loan is a quick and hassle-free way to secure funds by pledging your jewellery. It provides instant liquidity to manage urgent financial needs. But knowing your repayment amount is important to make wise borrowing choices. This is where a gold loan EMI calculator comes into play. It assists you in approximating the loan amount you can avail, interest rates that apply, and EMIs, thus making financial planning more effective. In this blog, we will discuss how a gold loan calculator works, its major advantages, and how to use it.

What Is Gold Loan EMI Calculator?

A gold loan calculator is a user-friendly online tool that helps estimate the loan amount you can secure by pledging gold as collateral. By entering key details such as gold weight, purity (carat), and the current market price, the calculator determines your eligible loan amount instantly. 

It also factors in the Loan-to-Value (LTV) ratio and loan tenure to provide a clearer picture of your repayment obligations. This tool enables borrowers to make informed financial decisions, ensuring they choose a loan amount that aligns with their needs and repayment capacity.

How To Use Gold Loan EMI Calculator?

Using the gold loan EMI calculator is a straightforward and hassle-free tool. To use it, you need to input the following details:

• The loan amount you wish to borrow
• The applicable interest rate
• The preferred loan tenure
• Once you have entered these details, the calculator will instantly display your exact EMI amount.

Formula for Calculating Gold Loan Interest​

When considering a gold loan, it is essential to grasp how interest is calculated. Here is a formula used by the gold loan interest calculator to calculate the interest amount payable:

EMI = [P x R x (1+R)^N] / [(1+R)^N-1]

Here is what each term means:

• P: Principal amount you have borrowed
• R: The monthly interest rate (annual rate divided by 12)
• N: The total number of monthly instalments

An EMI calculator also assists you in comprehending your repayment pattern, so you can be adequately equipped to handle your finances. Knowing these elements in detail, you can make intelligent choices regarding your gold loan.

Documents Required To Apply For Gold Loan 

Here is a list of documents you must submit when applying for a gold loan in India:

• Identity Proof: Aadhaar card, voter ID card, PAN card, passport or driving licence
• Address Proof: Aadhaar card, bank statement, utility bill, passport or voter ID card
• Proof of self-owned gold, ornaments or coins
• Duly filled application form with 2 recent passport-sized photographs
• Any other document required by the lender

Eligibility To Apply For Gold Loan 

To qualify for a gold loan, you must meet the following specific criteria:

• You must be between 18 and 65 years old.
• The gold offered as collateral must belong to you.
• The purity of the gold should be at least 18 karats and a maximum of 22 karats to ensure its value is sufficient for securing the loan. 

Benefits Of Using Gold Loan EMI Calculator

Here are the key benefits of using the gold loan interest rate calculator to calculate the monthly instalment amount of your gold loan:

Quick and Accurate Calculations: 

• With a gold loan calculator, you can obtain precise estimates of monthly instalment amounts in seconds. 
• It allows you to input your principal amount, interest rate and tenure, delivering instant results that help you make an informed financial decision.

Real-Time Updates: 

• The biggest advantage of a gold loan calculator is that it can display current gold prices. 
• It keeps your calculations up-to-date with prevailing market rates, enabling you to evaluate your loan choices properly and make the necessary adjustments in your financial plans.

Convenience: 

• A gold loan EMI calculator makes your planning easier. 
• It allows you to test various loan amounts and tenures easily and determine the optimal repayment facilities that suit your spending limit and lifestyle without the need for professional help.

Transparency: 

• The gold loan calculator gives you a transparent view of your EMIs, interest and total repayment amount. 
• It makes you aware of the cost of borrowing in a better way, so there are no surprises or hidden charges, which gives you confidence in your financial choices.

Factors Affecting Gold Loan EMI 

In today’s financial landscape, the gold rate per gram plays a crucial role in determining the loan amount you can secure. Since gold loans are backed by your jewellery as collateral, fluctuations in gold prices directly influence your borrowing potential.

• Higher Gold Prices, Higher Loan Value:  If the gold price per gram rises, you can secure a higher loan amount against the same quantity of gold.
• Loan Eligibility Depends on Purity: The purity of gold (carat value) affects the per gram rate used for loan calculations. Higher purity gold fetches better loan amounts.
• Market-Driven Loan-to-Value (LTV) Ratio: Lenders determine the LTV ratio based on market conditions, which impacts how much loan you receive per gram of gold.
• Gold Loan Calculator for Better Planning: Using a gold loan calculator, you can estimate your eligible loan amount, interest rates, and monthly EMIs to plan your finances effectively.

How to Calculate Gold Loan Per Gram Rate?

You need to calculate the gold loan per gram rate to determine the maximum borrowing amount. The gold rate per gram rate depends on the lender’s policies and the current market value of gold. Hence, to calculate the loan amount per gram, you must know the existing gold price and purity of gold you want to pledge. 

In addition, you must know the lender’s gold loan per gram rate, as it changes every day and use the EMI calculator to determine your monthly instalment. For instance, if the current gold loan rate per gram is Rs. 4,500 and you pledge 20 gm of jewellery with 22-karat purity, the per gram loan rate can be calculated using the following formula:

Loan Amount: Weight of gold article (in grams) x per gram price x loan-to-value ratio (LTV)

Hence, using this formula, we can determine the loan eligibility in the above example to be Rs. 67,500. In this case, the LTV ratio is 75%, as the lenders typically offer this rate to their customers.

A gold loan calculator is a valuable asset for anyone wishing to borrow a loan against their gold holdings. It provides an honest analysis of all the loan expenses, and by entering your gold's weight and purity, you can instantly see how much you can lend and compute your Equated Monthly Installment (EMI).Through this tool, you can borrow with confidence, making the journey smoother for you.