Calculate gold loan interest, total repayment, and compare bullet vs EMI repayment for loans against gold jewellery.
LTV (Loan-to-Value) ratio is the percentage of the gold's market value you can borrow. RBI regulations cap gold loan LTV at 75% for all lenders. This means for gold worth ₹1 lakh, you can borrow up to ₹75,000. Some lenders offer lower LTVs (60–70%) at lower interest rates.
Government banks offer the lowest gold loan rates: SBI charges 8.75–9.5% p.a., while Union Bank, Canara Bank, and Bank of Baroda charge 9–10% p.a. NBFCs like Muthoot Finance and Manappuram charge higher rates (12–26% p.a.) but process faster and are more accessible in smaller towns.
Gold loans are usually better than personal loans because: (1) interest rates are lower (8–15% vs 12–24% for personal loans), (2) processing is faster (same day), (3) no income proof needed, (4) no prepayment penalty in most cases. The only downside is you must pledge your gold as collateral.
If you default on a gold loan, the lender will send notices and then auction your gold to recover the outstanding amount. After paying off the loan amount and charges, any surplus from the auction is returned to you. It is crucial to repay on time to avoid losing your jewellery. Many lenders allow partial payments to avoid this.
Yes, but with restrictions. Banks accept gold coins sold by banks (like SBI Gold Coins) as collateral. However, most banks do not accept gold coins purchased from jewellers. RBI also caps the weight at 50 grams per customer for gold coin collateral. Gold ETFs and sovereign gold bonds are generally not accepted as collateral.