How gold loan EMI is calculated
EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P is the loan principal, r is the monthly interest rate (annual rate divided by 12 then by 100), and n is the tenure in months. We compute this for each of the 4 NBFCs at their current published interest rate, plus their processing fee.
What affects your final rate
Gold purity directly affects the loan amount: 22K gold gets ~91.6% of pure-gold value, 18K gets 75%. NBFCs typically lend at the higher LTV cap (75%) for shorter tenures and stronger credit profiles. Interest rates vary by lender (Muthoot averages 12 to 22%, Manappuram 12 to 24%, banks 9 to 12%, NBFC 10 to 18%). The figures shown are average published rates and may vary by branch, loan amount, and customer profile.
Hidden costs to watch
Processing fee 0.5 to 1.5% of principal, GST on processing fee 18%, valuation fee ₹200 to ₹500 per pledge, insurance premium for the gold (some lenders waive this), prepayment penalty 1 to 2% if you exit before tenure. The total cost of borrowing typically runs 2 to 4 percentage points above the headline interest rate when all fees are included.
Loan-to-value (LTV) cap
RBI caps gold loan LTV at 75% for EMI loans. Bullet repayment loans (single payment at end) have a 60% cap. The gold value used is the lower of (a) the price on pledge day, or (b) the average of the last 30 days. Some NBFCs use intra-day spot prices for premium customers.