How to use the Gold Loan Calculator
- 1 Enter the gold weight in tola.
- 2 Choose the karat.
- 3 Enter today's 24K rate.
- 4 Enter the bank's loan-to-value, markup and tenure.
Worked example
5 tola of 22K gold with 24K at Rs 425,636 a tola. The gold is worth about Rs 1,950,832. At 70% LTV the bank could lend about Rs 1,365,582. At 18% for 12 months, markup is about Rs 245,805, so you repay about Rs 1,611,387.
Features
Gold value
Based on weight, karat and today's rate.
Loan amount
At the bank's loan-to-value.
Repayment
Markup and total to repay.
When to use it
Short-term needs
Borrow without selling jewellery.
Business cash
Use gold for working capital.
Agriculture
Many banks offer gold-backed farm loans.
Comparing banks
Compare LTV and markup.
Frequently asked questions
What is a gold loan?
A loan secured by gold jewellery kept with the bank until you repay.
How much can I borrow?
Banks lend a percentage of the gold's value, often around 60% to 75%.
What is the markup?
Usually KIBOR plus a spread. Ask banks for current rates.
What if I cannot repay?
The bank can sell the gold after notice to recover the loan.
Is my gold safe?
Banks keep it sealed in their vaults and insured.
Are there Islamic options?
Some Islamic banks offer gold-backed financing under different structures.
Which banks offer gold loans?
Many commercial and microfinance banks offer gold-backed loans, especially for farmers and small businesses.
Is the gold valued at market price?
Banks value gold at a rate they set, often a little below the Sarafa rate, and test its purity.
Can I extend the loan?
Many banks allow renewal by paying markup.
What fees apply?
Processing, valuation and safekeeping fees may apply.
How is the karat of gold checked?
Banks test purity using machines or acid tests and value the gold according to its karat and weight.
Is a gold loan better than selling gold?
A gold loan lets you keep your jewellery and get it back after repayment, which suits short-term needs.
Can I repay early?
Yes. Most banks allow early repayment, which reduces the markup you pay.
What is the maximum tenure?
Gold loans usually run from a few months to one year, sometimes renewable.
Do microfinance banks offer gold loans?
Yes. Many microfinance banks offer smaller gold-backed loans, often with quick approval.
Does the gold price affect my loan?
If gold prices fall sharply, some banks may ask for more gold or partial repayment to keep the loan within the allowed limit.
Is my jewellery returned in the same condition?
Yes. Gold is sealed in front of you and returned in the same packet when you repay the loan in full.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated