Start with principal
Enter the amount borrowed rather than the value of the pledged gold.
Borrowing cost
Gold Loan Interest Calculator
Estimate how much interest a gold loan may cost using the principal, annual interest rate and loan tenure.
Interest amountTotal repaymentFlexible tenure
Interest calculator
Calculate gold loan interest
₹
Enter the principal amount borrowed.
% p.a.
Enter the annual rate quoted by the lender.
months
Enter how long the loan remains outstanding.
Principal
₹1,00,000
Annual rate
10%
Tenure
12 months
Estimated interest
₹10,000
Simple interest for the selected period
Total repayment
₹1,10,000
Principal
₹1,00,000
This calculator uses simple interest for estimation. Actual gold loan products may use different interest accrual, repayment schedules, fees or lender-specific methods.
Enter annual rate
Use the annual interest rate quoted for the gold loan.
Set the tenure
See how borrowing for a longer or shorter period changes estimated interest.
Interest methodology
Gold loan interest formula
Gold Ledger uses a simple-interest calculation for this estimator. It is useful for understanding the borrowing cost when interest is applied to the principal for a defined period.
Formula
Interest = P × R × T
The annual rate is converted from a percentage to a decimal before the calculation.
P = loan principal
R = annual interest rate as a decimal
T = tenure in years
Worked example
₹1 lakh at 10% for 12 months
Assume a ₹1,00,000 gold loan at 10% annual interest for one year.
Principal
₹1,00,000
Rate
10% p.a.
Tenure
12 months
Interest
₹10,000
Total repayment
₹1,10,000
₹1,00,000 × 10% × 1 year = ₹10,000 estimated simple interest.
This is an illustrative example, not a lender quote.
Important distinction
Interest calculator vs EMI calculator
This page estimates simple interest on the principal for the selected period. The Gold Loan EMI Calculator uses a reducing-balance EMI formula instead. These are different repayment models, so their interest results should not be expected to match.
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ExploreCommon questions
Gold Loan Interest FAQ
How is gold loan interest calculated?
This calculator estimates simple interest using the loan principal, annual interest rate and tenure. Interest equals principal multiplied by the annual rate multiplied by the tenure expressed in years.
What is the formula for gold loan interest?
For this calculator, simple interest = principal × annual interest rate × tenure in years. The annual percentage rate is converted to a decimal before calculation.
How much interest is charged on a ₹1 lakh gold loan?
It depends on the annual interest rate and tenure. For example, at 10% per year for 12 months, simple interest on ₹1,00,000 is ₹10,000.
Is gold loan interest calculated monthly or yearly?
Interest rates are commonly expressed as annual rates, but lender accrual and repayment methods can vary. This calculator converts the selected tenure in months into a fraction of a year for a simple-interest estimate.
Is simple interest the same as EMI interest?
No. This calculator estimates simple interest on the principal for the selected period. A standard EMI calculator generally uses a reducing-balance method, where interest is calculated on the outstanding balance over time.
Does this calculation include processing fees or penalties?
No. Processing fees, valuation charges, taxes, overdue interest, penalties and other lender-specific costs are not included.
Will the lender charge exactly the amount shown here?
Not necessarily. The result is indicative. Actual interest and repayment depend on the lender's product, interest-accrual method, repayment structure, fees, rounding and contractual terms.