Gold loan EMI calculator: A complete guide

May 23, 2022

Gold loan EMI calculator: A complete guide

Gold is one of the most popular investment modes worldwide, especially in India. Almost every Indian household stores this yellow metal as a symbol of auspiciousness and wealth. This is why collateralising this metal to avail funds makes for the most feasible borrowing mode for most individuals in the country, aiding in the popularity of gold-backed loans.

However, borrowing just any amount of loan against gold without an effective repayment plan can burden a borrower’s finances and even result in loan default. In this regard, using a gold loan EMI calculator can be of great help for prospective borrowers.

What is a gold loan EMI?

EMI stands for equated monthly instalments. Like that for any other financial product, EMI against gold loan indicates the monthly repayments that borrowers need to make against a gold-backed fund. This amount stays constant throughout the tenure and comprises principal and interest components.

Having prior knowledge of this periodical repayment amount is important for applicants to effectively plan their finances over the entire tenure. As a result, this reduces the chances of delayed payments and default. An online tool helping individuals avail the same is a gold loan calculator.

What is a gold loan EMI calculator?

A gold loan EMI calculator is an online equipment that lets individuals determine the possible monthly repayment amounts they will incur against a loan amount. Users can also get a breakdown of their total interest outgo and principal repayment separately by using this online tool. In this respect, an online EMI calculator also performs the task of an interest calculator. All users need to do is enter their required loan amount, suitable tenure, and interest rate. This makes using this tool before getting a loan is one of the best finance saving ideas.

What is the formula to calculate gold loan EMI?

An online gold loan EMI calculator uses a simple formula to let borrowers find their EMIs. This formula can be mathematically represented as follows:

A = P x R x [(1+R)n / {(1+R)n – 1}]

Here, A stands for the periodical EMI, P denotes the principal loan amount, R is the interest rate, and n stands for total tenure.

Prospective gold loan borrowers can also use this formula to derive their EMIs manually. However, manual calculations are time-consuming and have room for plenty of errors, which isn’t ideal for serious financial undertakings. Using an automated EMI calculator eases the entire process. Individuals willing to take help of the same must first know how to use this online tool.

How to use a gold loan calculator to determine EMIs?

A gold loan EMI calculator is extremely easy to use as well accessible. Almost all loan providers provide an online EMI calculator on their official website and Rupeek is no exception.

In order to utilise this tool, individuals first need to visit the online gold loan calculator page. After that, they can proceed in one of the following ways depending on their required information.

To know the required gold

Step 1: Click on the ‘Choose required Loan Amount’ tab on the calculator page.

Step 2: Next, provide your required loan amount, and choose your suitable interest rate and tenure.

After this, the calculator will provide the data for gold required, total interest payable, and monthly interest.

To know the required loan amount

Step 1: Select the ‘Choose available Gold Weight’.

Step 2: Enter the total weight of gold you possess in grams and its purity in Karats.

Step 3: Provide your suitable rate of interest and tenure.

Upon completing this process, the online calculator will display the total funds you can acquire against your collateral, the monthly interest and total interest.

If content with the results of the calculator against their conditions, individuals can also place an application for the same amount instantly. They only need to enter their contact number and hit the ‘Apply Now’ button.

What are the factors affecting gold loan EMI?

Now that you are acquainted with the process to use an online gold loan EMI calculator, it is essential to know the different factors affecting the way it works.

Here are the 3 components of the EMI calculation formula that affect the final result.

Loan amount: This indicates the principal amount or the total fund amount an individual borrows against his/her gold jewellery items. This amount is directly proportional to the EMI amount. Therefore, your gold loan EMI will increase with a rise in the principal loan amount.

Repayment tenure: This indicates the total time for which borrowers take a loan. The loan tenure is inversely proportional to the EMI amount. A long repayment tenure will lower the EMI. Contrarily, opting for short tenure will result in heftier EMIs.

Rate of interest: The loan interest rate directly affects your total repayment amount and, hence, your EMI. A higher interest rate will raise your total interest outgo and, thus, increase the monthly repayment amount.

Benefits of using a gold loan calculator

Following are some ways in which prospective borrowers can benefit from using an online gold loan calculator.

Speedy results: Calculating EMIs manually using the mathematical formula can take up a lot of time. On the contrary, an online EMI calculator provides instantaneous results, saving a user’s time and energy.

Accurate calculation: Besides being time-consuming, manual calculations can be fraught with errors. A significant financial decision, like opting for a gold loan, calls for precise calculations. An online gold loan EMI calculator aids in this process, letting individuals view results that are accurate for every value entered.

User-friendly: These online tools are easily accessible as well as easy to use. Interest individuals only need to enter specific loan details, like total principal amount, interest rate, and tenure, to get their desired results within a few seconds.

Effective financial management: Most importantly, an online calculator helps prospective borrowers get an estimate of their loan EMIs and plan their repayment accordingly in advance. This aids in effective financial management and brings down chances of loan default.

These instantaneous and error-free results of these online tools also help individuals conduct comparisons among different online lenders easily and quickly. As a result, these also help individuals choose the loan provider with terms and conditions best suiting the former’s requirements.

In this regard, individuals can turn to a reputed lender like Rupeek to access multiple repayment modes and choose one as per their convenience. Additionally, you can enjoy the latest offers on such funds by opting for an online gold loan from Rupeek.

Frequently Asked Questions

1. How to calculate total interest on gold loans?

A simple way to calculate your total interest is to subtract the principal from the final repayment. Alternatively, potential borrowers can use a gold loan EMI calculator to determine their total interest payable in advance.

2. Can I prepay gold loan EMIs?

Yes, individuals can make part-payments against their gold loan to reduce their tenure, and hence the total interest outgo.

3. What are the charges applicable against gold loan foreclosure?

Individuals availing a Rupeek gold loan can completely repay their loan and retrieve their gold ornaments to avail foreclosure without incurring any extra charges.

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