Gold Loan interest calculation: 4 things you did not know

Learn everything you need to know about gold loan interest rates and the commonly used terms in the calculation process.
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Gold Loan interest calculation: 4 things you did not know
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2 min read
16 June 2025

Key factors to know about gold loan interest calculation

Are you considering a gold loan to meet your financial needs? Gold loans are an excellent way to leverage the value of your gold jewellery without having to sell them. However, understanding gold loan interest calculation is crucial before you embark on this financial journey.

Here are the 4 things you need to know about calculating gold loan interest rate:

  1. Type of interest rate – Gold loans may carry fixed or reducing balance interest rates. Knowing which one applies will impact your total repayment.
  2. Loan amount and tenure – Higher loan amounts and longer tenures can affect the overall interest payable.
  3. Loan-to-value (LTV) ratio – This determines how much loan you get against the gold's value, indirectly impacting the interest charged.
  4. Repayment frequency – Monthly, quarterly, or end-of-term repayments also play a role in how your interest accumulates.

Being informed about these factors helps you plan your repayments wisely.

The gold loan amount

When applying for a gold loan, the loan amount plays a significant role in determining the interest you will pay. The loan amount is determined by evaluating the value of your gold assets. The higher the value of your gold, the higher the loan amount you can expect. It is essential to keep in mind that leading financial institutions provide an LTV of up to 75% of the gold's value as the loan amount.

The gold loan interest rate

Gold loans generally come with two types of interest rates—fixed and floating. A fixed interest rate offers predictability, as the rate remains constant throughout the loan tenure, making it easier to plan your monthly repayments. On the other hand, a floating interest rate changes with market conditions, which may lead to fluctuating instalments. While fixed rates offer stability, floating rates might be beneficial during periods of declining interest. It is essential to evaluate your financial situation and risk appetite before choosing. Learn more about the gold loan interest rate to make an informed borrowing decision.

The gold loan tenure

The gold loan tenure is another crucial factor in gold loan interest calculation. It refers to the duration for which you borrow the funds. Generally, gold loans have shorter tenures compared to other types of loans. The tenure can range from a few months to one year, depending on the lender and your repayment capacity. It is important to consider your financial goals and ability to repay when selecting the loan tenure, as it can influence the overall interest payable.

Gold loan calculator

To simplify the process of estimating the interest and overall repayment amount, most financial institutions provide online gold loan calculators. These calculators consider factors such as the gold loan per gram rate, loan tenure, and repayment schedule to provide you with the interest payable on your loan. By utilising a gold loan calculator, you can plan your finances effectively, ensuring that the loan is affordable and fits within your budget.

How to apply for a gold loan from Bajaj Finance?

You can easily avail of a gold loan from Bajaj Finance if you are an Indian citizen between the ages of 21 and 70 years. You just need have any one of your KYC documents for gold loan (Aadhaar Card, voter ID card, driving licence, or passport) ready to get of a gold loan.

Follow a few easy steps to get a quick gold loan from Bajaj Finance:

Step 1: Navigate to the Bajaj Finserv Gold Loan page.

Step 2: Select and open the online application form.

Step 3: Fill in the first and last name as it appears on PAN card.

Step 4: Enter the 10-digit mobile number and select the city.

Step 5: Enter the OTP sent to the registered mobile number and submit the application.

Step 6: Set up an appointment at the nearest gold loan branch, from the options displayed, and bring the gold jewellery there in person for evaluation.

Apply online for a gold loan today

How is the interest on a gold loan calculated?

At Bajaj Finance, the interest on gold loan is calculated based on the loan amount, the applicable gold loan interest rate, and your chosen repayment option. You can easily estimate this using our online gold loan calculator. Here is how it works:

  • Loan Amount: Enter the amount you wish to borrow against your gold jewellery.
  • Interest Rate (% p.a.): Input the annual interest rate offered by Bajaj Finance.
  • Repayment Option: Select how often you plan to repay—monthly, quarterly, or at loan maturity.
  • Results: The calculator displays the total annual interest payable and the estimated gold weight required, based on the current gold price per gram.

This calculation helps you get a clear view of your financial obligations and plan your repayments efficiently. You may check the current gold loan interest rate for accurate estimation.

Disclaimer

1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Frequently asked questions

What factors affect the interest rate on a gold loan?

The interest rate on a Bajaj Finserv Gold Loan depends on multiple factors including the loan amount, current gold value, loan-to-value (LTV) ratio, and repayment option selected. Market conditions and borrower profile may also influence the applicable rate.

Is gold loan interest calculated monthly or annually?

At Bajaj Finance, the gold loan interest is quoted annually (per annum), but accrual is calculated as per the selected repayment frequency—monthly, bi-monthly, quarterly, half-yearly or at loan maturity. Interest payable depends on tenure and chosen repayment structure.

Can I calculate my gold loan interest using an online calculator?

Yes, Bajaj Finance provides a simple online gold loan calculator. By entering the loan amount, interest rate, and repayment frequency, you can estimate the annual interest payable and gold weight required based on current gold rates.

Does the gold loan interest rate vary for different tenures?

Gold loan interest rates at Bajaj Finance remain consistent for a given customer profile, but the total interest payable may vary based on the tenure and chosen repayment plan. Longer tenures may result in higher overall interest.

What is the difference between fixed and reducing interest rates in gold loans?

In fixed interest model, the interest is calculated on the sanctioned loan amount. In contrast, a reducing rate applies interest on the outstanding balance. It is important to note that Bajaj Finance offers gold loans at fixed interest rates.

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