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EMI Formula:
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Gold Loan EMI calculation helps borrowers determine their monthly repayment amount for gold-backed loans in India. It uses the standard EMI formula to calculate fixed monthly payments throughout the loan tenure.
The calculator uses the EMI formula:
Where:
Explanation: The formula calculates the fixed monthly payment (EMI) that includes both principal and interest components, ensuring the loan is fully repaid by the end of the term.
Details: Accurate EMI calculation is crucial for financial planning, budgeting, and ensuring loan affordability. It helps borrowers understand their repayment obligations before committing to a gold loan.
Tips: Enter principal amount in ₹, annual interest rate in percentage, and loan term in months. All values must be valid (principal > 0, interest rate > 0, term between 1-360 months).
Q1: What is the typical gold loan interest rate in India?
A: Gold loan interest rates in India typically range from 7% to 29% per annum, depending on the lender and loan amount.
Q2: What is the maximum loan tenure for gold loans?
A: Most banks and NBFCs offer gold loans with tenure ranging from 3 months to 3 years, though some may extend up to 5 years.
Q3: How is gold valuation done for loans?
A: Gold is valued based on current market price, purity (usually 22-24 carat), and weight. Most lenders offer 60-80% of the gold's market value as loan.
Q4: Are there any prepayment charges for gold loans?
A: Many gold loans allow prepayment without charges, but terms vary by lender. It's advisable to check the specific terms before availing the loan.
Q5: What happens if I default on gold loan EMI?
A: Defaulting may lead to penalty charges, and prolonged default could result in the lender auctioning the pledged gold to recover the outstanding amount.