Gold Loan EMI Calculator: Features, Benefits & More

Gold is an integral part of Indian culture. Additionally, it is also a great way to secure a loan in times of need. 

Before availing a gold loan, you must consider several factors including interest rate, tenure, EMI, and its impact on your finances. A gold loan EMI calculator is the right tool to help you navigate the world of gold loans easily. 

What is a Gold Loan?

A gold loan is a secured loan against collateral of a gold ornament or asset. A secured loan has a lower interest rate than an unsecured loan because the lender has gold as collateral. The amount approved as a loan is often a percentage of the total cost of the gold deposited.

How Can You Avail of a Gold Loan?

Obtaining a gold loan is a very simple process. To get a gold loan, you can follow the steps below:

• Learn about the interest rates, terms, and conditions of major gold loan lenders.
• Approach the lender of your choosing with the gold you intend to pledge.
• Get the gold valued by your lender.
• Once the value is determined, you can obtain a loan for up to 75 – 90% of the gold’s worth.
• The gold, which will be held in safe custody until the loan is paid off, must be pledged to your lender.
• The money is disbursed into your account, and the EMI for the loan begins.

What is the Formula for Calculating Gold Loan EMI?

Using the following formula, you can readily calculate the amount of EMI you will be paying against your gold loan. The formula for calculating gold loan EMI is as follows:

E =  P x R x (1+R)^N 

      ————————

       [(1+R)^N-1]

Where, 

P is the principal amount that is borrowed

R is the rate of interest imposed

N is the tenure in the number of months

Example: 

If Rs. 1,00,000 is the amount borrowed (P), 12% is the rate of interest imposed (R), and 60 months is the tenure (n), the EMI to be paid using the above formula will be:

1,00,000 x 0.01 x (1+0.01)^60 / [(1+0.01)^60-1] = Rs.2,224 (per month)

The rate of interest (R) is calculated monthly i.e. it is calculated as (Annual Rate of interest/12/100) in this case (12/12/100 = 0.01)

What is a Gold Loan EMI Calculator?

A gold loan calculator is an effective tool that borrowers can use to determine their gold loan eligibility and the monthly installments they require to repay the loan in a set period. 

The calculator makes gold loan EMI calculations easier. Simply enter the relevant information into the calculator and submit it for accurate and immediate results. This allows you to research and plan your loan more efficiently.

How Does the Gold Loan EMI Calculator Work?

Calculating the EMI of a loan manually is time-consuming and tiring. To save you the effort, time, and mental strain of it all, gold loan EMI calculators have been introduced. 

Using a gold loan EMI calculator lets you easily calculate your monthly installments by considering your principal loan amount, interest rates, loan tenure, and the value of the gold you intend to use as collateral.

To use the gold loan EMI calculator, enter the loan amount, period, and interest rate.

Based on your inputs, the loan EMI calculator tool calculates the qualifying loan amount and the monthly installment you must pay.

What are the Advantages of Using a Gold Loan EMI Calculator?

Gold loan EMI calculator provides several benefits apart from saving you time and effort. The various advantages of using a gold loan calculator are:

User-Friendly

This online tool is simple to use. Users just have to enter particular loan details like the total principal amount, interest rate, and loan tenure to get accurate and immediate results. 

Effective Financial Management

An online calculator, in particular potential borrowers in estimating loan installments and planning repayment accordingly. As a result, there is a lower risk of loan default and improved financial management.

Immediate Results

Manually calculating EMIs using the mathematical formula is time-consuming. In contrast, an online EMI calculator gives quick results, saving users time and resources better spent researching good lenders.

Accurate Calculations

Manual computations can become complicated due to errors, which are often time-consuming. Big financial choices, such as a gold loan, need precise calculations. 

Gold loan EMI calculator is a digital tool that presents accurate results without any errors. You change the numbers several times and compare each result to better understand your loan terms. 

Points to Remember While Availing a Gold Loan

Though obtaining a gold loan appears to be simple, there are a few things to consider before doing so:

• You risk losing your gold if you do not repay your loan on time.
• Because the gold is held by the lender, you will not be able to use it in times of need. This could be a disadvantage, especially if you have a longer-term gold loan.
• When you fail to make your payments on time, your credit score suffers.

Related Articles: Lowest Interest Rate Bank on Gold Loans

In Summary, 

The gold loan EMI calculator helps borrowers, who plan on taking a loan by placing their gold as collateral, to calculate the amount of the EMI they will pay when they take out the gold loan. 

This tool is quite useful because it reduces the borrowers’ efforts and provides a realistic estimate of the monthly installment amount they must pay. The Gold Loan EMI calculator is a useful tool that can be used any number of times to determine the precise amount of interest payments that borrowers must make to repay their loans.