Estimate the monthly EMI on a gold loan based on the loan amount, rate and tenure.
EMI = P × r × (1+r)n / ((1+r)n − 1), where P is loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly installments.
Gold loans are typically shorter-tenure and secured against gold jewelry value (usually 60-75% loan-to-value).
From 1 April 2026, RBI replaced the old flat loan-to-value cap with a tiered structure: loans up to ₹2.5 lakh can go up to 85% of the gold's value, loans between ₹2.5 lakh and ₹5 lakh up to 80%, and loans above ₹5 lakh capped at 75%. This applies to fresh loans sanctioned from that date onward — loans already sanctioned before 1 April 2026 continue under whatever LTV applied when they were taken out. Because the cap now depends on loan size rather than being a single flat percentage, borrowing a slightly smaller amount can sometimes unlock a meaningfully higher LTV tier, worth checking before finalizing the loan amount.
Gold loans typically offer two repayment structures: regular EMIs (principal plus interest each month, like any other loan) or a bullet repayment option (paying only accruing interest periodically, with the full principal due at maturity) — the second is popular with borrowers expecting a lump sum later, but it means the total interest owed keeps compounding on the full principal throughout the term rather than shrinking as payments are made. The gold pledged as collateral is valued using RBI-mandated purity and weight assessment at the time of the loan, not the borrower's own estimate, and failure to repay carries real risk of the lender auctioning the pledged gold to recover the loan.
It depends on the loan size: up to 85% of your gold's assessed value for loans up to ₹2.5 lakh, up to 80% for loans between ₹2.5 lakh and ₹5 lakh, and up to 75% for loans above ₹5 lakh — a tiered structure that replaced the previous flat cap for all fresh loans sanctioned from 1 April 2026 onward.
With EMI, you pay both principal and interest each month, so the outstanding balance (and future interest) shrinks over time. With bullet repayment, you pay only the accruing interest periodically and the full principal is due in one lump sum at maturity — interest keeps compounding on the untouched full principal throughout, which usually means more total interest paid by the end.
The lender has the right to auction the pledged gold to recover the outstanding loan amount, typically after a defined default period and notice — this is the core risk of any secured loan, and it is worth confirming the specific default and auction timeline with the lender before borrowing.
No — the tiered LTV structure applies only to loans sanctioned from 1 April 2026 onward. Loans sanctioned before that date continue under the LTV rules that applied at the time they were taken out, unless the loan is renewed or refinanced under the new framework.