Jewel Loan Calculator
See exactly how interest on your gold loan builds up — day by day and month by month — until the date you plan to close it.
Estimate eligible loan amount
Optional — based on your gold's weight, rate per gram, and the lender's loan-to-value limit.
Gold value
1,20,000
Estimated eligible loan
90,000
A gold loan is secured against jewellery you pledge with a lender. This calculator works out how much you can borrow from the weight and purity of the ornament, what the interest costs, and what repayment looks like under the different structures lenders offer.
The two numbers that determine everything are the net gold weight — stones and non-gold parts excluded — and the loan-to-value ratio the lender applies to the metal's appraised worth.
Loan-to-value: why you get less than the gold is worth
Lenders advance a percentage of the appraised value, not the full amount, because the gold is collateral against a falling market. Regulators cap this ratio in many countries — in India it has generally been capped around 75% for gold loans.
The practical effect: ₹100,000 of gold gets you at most ₹75,000. If the gold price falls sharply during the loan, the lender may ask you to pledge more or repay part of the balance to restore the ratio — a margin call, and the risk people least anticipate.
Repayment structures lenders offer
| Structure | How you pay | Best when |
|---|---|---|
| Bullet repayment | Nothing monthly; principal plus interest at the end | Short term with a known incoming payment |
| Interest-only | Monthly interest; principal at maturity | You want low monthly outgo |
| Regular EMI | Principal and interest monthly | You want the debt genuinely cleared |
| Overdraft | Interest only on what you draw | Irregular, uncertain cash needs |
Bullet repayment looks cheapest month to month and costs the most overall, because interest accrues on the full principal throughout.
Before you pledge
- Get the appraisal in writing, with net gold weight, purity and the valuation rate used, all itemised.
- Ask what happens to any gemstones — their weight should be excluded from the gold valuation but they remain in the lender's custody.
- Check the storage and insurance arrangements, and confirm they cover the period while pledged.
- Read the auction clause. If you default the lender can sell the ornament; the notice period and process should be stated in the agreement.
- Compare the effective annual rate, not the monthly rate. 1.5% a month is 18% a year.
- Confirm whether there's a prepayment penalty — gold loans are often taken for short-term needs and repaid early.
Frequently asked questions
- How much can I borrow against my gold?
- Typically up to around 75% of the appraised value of the pure gold content, though the exact loan-to-value ratio depends on the lender and local regulation. Stones and non-gold components are excluded from the valuation.
- Is the interest rate on a gold loan lower than a personal loan?
- Usually yes, because the loan is secured. The trade-off is that your jewellery is held by the lender and can be auctioned if you default.
- What happens if the gold price falls during my loan?
- The lender may issue a margin call, asking you to pledge additional gold or repay part of the principal to restore the loan-to-value ratio. This is the main risk of a longer-term gold loan.
- Which repayment option costs least?
- A regular EMI that clears principal alongside interest costs least overall, because the balance interest is charged on keeps falling. Bullet repayment costs most but demands nothing month to month.
- Can I get my jewellery back before the term ends?
- Yes, by repaying the outstanding principal and accrued interest. Check the agreement for any prepayment or foreclosure charge before assuming it's free.