Example
Example, not your result| EMI | Interest only | |
|---|---|---|
| Monthly payment | $13,187.38 | $1,250.00 |
| Principal due at the end | $0.00 | $150,000.00 |
| Total interest | $8,248.60 | $15,000.00 |
| Total repayment | $158,248.60 | $165,000.00 |
An EMI clears the loan over the term. An interest-only plan has a lower monthly payment and repays the whole principal at the end. Actual terms vary by lender and charges.
Your inputs
- Loan amount
- $150,000.00
- Monthly interest rate
- 0.83%
Formula
Gold Value = (24K Rate ÷ 10) × Quantity
Eligible Loan = Gold Value × Loan %
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
Interest only: Monthly Interest = P × r, Total Interest = P × r × n, Total Repayment = P + Total Interest
where P = loan amount, r = monthly rate, n = number of months
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Reviewed 26 Sept 2026 · by GoldC Team · How we calculate this
How to calculate gold loan interest, and the EMI
An EMI is a fixed monthly payment that repays the loan and its interest over the tenure. The interest is charged on the balance that is still unpaid. A famous model in India is the monthly interest-only gold loan: interest is paid each month and the principal is repaid at the end (the calculator's "Interest only" mode).
Interest on a gold loan is charged in one of two ways, depending on the loan. On an interest-only loan it is charged on the full amount each month and the principal is returned at the end. On an EMI loan it is charged on the balance that is still unpaid.
- Monthly interest (interest-only) = loan × monthly rate
- Total interest (interest-only) = monthly interest × months
- Monthly rate = yearly rate ÷ 12 ÷ 100 (or the monthly rate you enter)
- EMI = loan × rate × (1 + rate)months ÷ ((1 + rate)months − 1)
- Total repayment = EMI × months
- Total interest = total repayment − loan
Some gold loans charge only the interest each month and return the principal at the end. Choose the interest-only option for those: interest each month = loan × monthly rate.
Worked examples
EMI: a loan of 100,000 at 12% a year for 12 months has a monthly rate of 1%. The EMI is 8,884.88, the total repayment 106,618.55 and the total interest 6,618.55 (in whichever currency you enter above).
Yearly rate, interest only: 100,000 at 12% a year for 12 months is a monthly rate of 1%, so the interest is 1,000 a month and 12,000 over the year. The same loan on an EMI costs 6,618.55 in total interest, because each EMI reduces the balance the interest is charged on.
Interest only: the same 100,000 at 1% a month for 6 months costs 1,000 a month, 6,000 in total, and you repay 106,000 including the principal.
What the calculator leaves out
Lenders can add a processing fee, valuation or storage charges, insurance, GST on fees and a penalty for late payment or early closure. None of these is in the result, so ask the lender for the full cost of the loan and the way interest is charged (monthly or yearly, on the reducing balance or on the whole amount).
If you tick "use gold value", the loan amount is the gold value multiplied by the loan-to-value percentage you enter. Lenders set their own percentage within limits set by their own country's regulator — in India this is the Reserve Bank of India — so check the current rules where you are borrowing and your lender's terms.
Quick answers
How do I calculate the monthly interest on a gold loan?
Multiply the loan by the monthly rate. For 100,000 at 12% a year (1% a month) that is 1,000 a month. If you repay by EMI instead, the interest is charged on the falling balance, so the total over 12 months is 6,618.55.
Is a lower EMI always cheaper?
No. A longer tenure lowers the EMI but raises the total interest. Compare the total interest, not only the monthly payment.
What is the difference between a yearly and a monthly rate?
A rate quoted per month is about twelve times the yearly rate. 1% a month is 12% a year before compounding, so enter the rate in the period the lender quotes.
Does this show what my gold is worth?
Only if you use the gold value option with a rate you enter. Use the gold purity converter to find the pure gold weight your lender will value.
Reviewed 26 September 2026. Reference tool only; not a loan offer or advice.