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Total Interest Formula:
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The Bank Gold Loan Interest Calculator helps calculate the total interest payable on a gold loan in India. It uses the formula: Total Interest = (EMI × Number of Months) - Principal Amount, providing borrowers with a clear understanding of their interest costs.
The calculator uses the formula:
Where:
Explanation: This formula calculates the total interest paid over the loan period by subtracting the principal amount from the total of all EMI payments made.
Details: Understanding total interest helps borrowers compare different gold loan offers, plan their finances better, and make informed decisions about loan tenure and affordability.
Tips: Enter your monthly EMI amount in rupees, the loan tenure in months, and the principal loan amount. All values must be positive numbers.
Q1: What is a gold loan in India?
A: A gold loan is a secured loan where gold ornaments are pledged as collateral with banks or NBFCs to obtain funds.
Q2: How is EMI calculated for gold loans?
A: EMI is calculated based on principal amount, interest rate, and loan tenure using standard amortization formulas.
Q3: What are typical interest rates for gold loans in India?
A: Gold loan interest rates typically range from 7% to 29% per annum depending on the lender and loan amount.
Q4: What is the maximum loan-to-value ratio for gold loans?
A: RBI guidelines allow up to 75% loan-to-value ratio for gold loans sanctioned by banks.
Q5: Are there any tax benefits on gold loan interest?
A: Generally, gold loan interest is not eligible for tax deductions under Section 80C as it's not considered a purpose-specific loan.