Need cash urgently without selling your family jewellery? A gold loan is one of India's fastest and most affordable borrowing options — processed in under 2 hours at most banks. This calculator tells you exactly how much you can expect to get, based on the same formula banks use.
How Much Can You Borrow Against Your Gold?
A gold loan lets you pledge your jewellery at a bank or NBFC and receive cash within hours — without selling the gold permanently. The bank stores your jewellery safely in their vault while you use the money, and returns it once you repay the full loan and interest.
The loan amount depends on two things: the current 24K gold market price, and the LTV ratio (Loan-to-Value). The RBI caps the maximum LTV for banks at 75% of the gold's value. Banks also use about 90–95% of the MCX spot rate (not the full jeweller's retail price) when assessing value — this calculator uses 92%, which is a common benchmark.
22K is Most Common
Most household jewellery in Odisha is 22-karat. Banks accept 18K to 24K. Higher purity means higher loan amount per gram pledged.
Stones Don't Count
Diamonds, rubies, emeralds, and all other stones are excluded from gold valuation entirely. Only the net weight of pure gold is counted.
Check Today's Rate
Gold prices change daily. Search "MCX gold rate today" to get the current 24K rate before visiting a bank for your gold loan.
Real Example: How Much for 20 Grams of 22K Gold?
Let's say today's 24K MCX gold rate is ₹9,200 per gram. You have 20 grams of 22K gold jewellery. Here's how the bank calculates your loan:
| Step | Calculation | Value |
|---|---|---|
| Pure gold weight | 20g × (22÷24) | 18.33 grams pure gold |
| Market value (at 92% of MCX rate) | 18.33g × ₹9,200 × 0.92 | ₹1,55,378 |
| Maximum loan (75% LTV) | ₹1,55,378 × 0.75 | ₹1,16,534 |
So for 20 grams of 22K gold jewellery, you can expect to get approximately ₹1.1–1.3 lakh from a bank (the exact amount varies slightly by lender and the day's MCX rate). NBFCs like Muthoot Finance or Manappuram may offer slightly different rates.
Gold Loan vs Personal Loan — Which is Better?
If you need money urgently and have gold at home, a gold loan almost always beats a personal loan. Here's a direct comparison:
| Feature | Gold Loan | Personal Loan |
|---|---|---|
| Interest Rate | 8.75–12% (banks) | 10–22% |
| Processing Time | 1–2 hours | 1–5 working days |
| Income Proof Required | Not required | Mandatory (salary slips, ITR) |
| CIBIL Score Check | Not required | Critical (700+ needed) |
| Foreclosure Charges | Nil at most banks | 2–4% on outstanding amount |
The key advantage of a gold loan is that the gold acts as collateral, so the bank doesn't need to verify your creditworthiness through income or CIBIL. This makes it an excellent option for farmers, homemakers, self-employed individuals, or anyone who needs quick cash but doesn't have a formal income history.
Types of Gold Loan Repayment Options
Unlike personal loans where you must pay a fixed EMI every month, gold loans offer more flexible repayment structures:
- EMI-Based Repayment: Pay a fixed EMI every month (like a personal loan). The gold is returned when the loan is fully repaid. Best if you have regular income and want to systematically close the loan.
- Bullet Repayment: Pay only interest each month, and repay the full principal at the end of the tenure. Useful for farmers and traders who get lump-sum income seasonally. Most common with 1-year gold loans.
- Overdraft (OD) Facility: Offered by some banks (SBI's Gold Loan OD, for example). You get a credit limit against your gold and pay interest only on the amount you actually use. Highly flexible for business owners and traders.