How Can We Calculate Gold Loan EMI?


So let's get to know about what a gold loan is first to understand how we have to choose the interest rate, tenure and EMI options. 

What is a gold loan?

Gold loan is basically the loan you get against the gold you'll pledge as collateral or security. It is a secured loan offered by multiple banks and NBFCs (Non-Banking Financial Companies) across the country. The gold ornaments or coins will be kept with the bank until you pay back the amount along with the interest rate, and if you're unable to pay the loan amount, the bank will seize your gold and sell it off to cover the loan amount. 

Why should you take a gold loan?

A gold loan is the best choice to meet your immediate fund requirements if you have any gold ornaments or if you have a bad credit score. 

Interest Rate:- The interest rate for gold loans is usually less. And the interest rate usually depends on the loan amount that you'll take against your gold. So if the loan amount you've taken is high, then you have to pay a high interest rate and vice versa if you have taken a low loan amount.

Repayment Tenure:- Banks offer flexible repayment options, so you can extend your loan tenure if you're unable to pay the whole amount or if you have any financial constraints. But it is advisable to keep your loan amount short so that you won't end up paying more money as interest. 

Charges:- A lot of banks and financial institutions don't charge you for other expenses like prepayment charges or foreclosures fees. But a lot of banks like Indian Bank gold loan do charge you, so you'll have to search and choose the bank that fits your needs perfectly. 

Documentation:- The documentation process is quick, and you don't have to wait for days or months to get this loan approved. A lot of banks approve this within a few minutes. 

The application process of gold loan

To get a gold loan, you have to follow the procedure.

1. First, you'll have to check your eligibility, and if you're eligible to apply for a gold loan, then you'll have to fill an application form given by the bank.

2. The second step is to attach all the essential documents like Aadhar Card, Pan Card or passport for verification purposes.

3. Then the bank will check your gold purity and will decide the loan amount, tenure and interest rate. You can always try to negotiate the interest rate and increase the loan tenure.

4. Once the bank verifies your documents, then you'll get the money transferred to your bank, or you'll get DD (Demand Draft) or cheque. 

Gold loan EMI calculator

If you want to calculate your gold loan per gram and the EMI you'll have to pay every month along with interest, then you can use this tool. 

1. You'll have to type the loan amount you want to take from the bank. And then you can choose whether the amount is in crore or in lakhs. Some EMI tools have the option to choose the money in thousands, whereas a lot of them don't.

2. The next step is to choose the interest rate. The gold loan interest rate usually ranges between 7% to 13% p.a. but you can type whatever the interest rate bank has given you.

3. Then you'll have to choose the loan tenure in months or years, and then select the 'calculate button'. 

The tool will then show you the amount of EMI you'll be paying every month, along with the interest rate.


It is advisable to calculate the EMI you'll have to pay every month before making any decision. Because if you're unable to pay the instalments, then the bank has every right to seize the gold and sell it to recover the loan amount.