Gold loan interest calculator
Work out interest on a gold or jewel loan using a monthly or annual rate, simple or compound, with the part-month rule your lender actually applies. Nothing is sent anywhere — it runs entirely in your browser.
Loan details
Enter an amount and make sure the closing date is after the loan date.
- Period
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- Effective rate
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- Principal
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- Interest
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- Interest per day
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- Total payable
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| Month | Interest | Cumulative interest | Payable |
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An estimate, not a quotation. Your lender's grace days, minimum interest period and charges outside interest are not included. Always confirm against your pledge slip.
Why the same loan gives three different answers
Two lenders can both quote “2% per month” on a ₹1,00,000 loan and hand back different figures at closing, because the quoted rate is only one of three variables.
The rate basis. 2% per month is 24% per annum, not 2% per annum. Obvious once stated, and still the most common misunderstanding at the counter.
Simple or compound. On six months the gap is minor. On a loan renewed repeatedly over two or three years, compounding at monthly intervals produces a materially larger figure than simple interest at the same nominal rate.
The part-period rule. A loan closed on day 185 is six months and five days. Rounded up it is seven months of interest. Pro-rated it is roughly six and a sixth. On a ₹1,00,000 loan at 2% that difference is around ₹1,600 — which is why it is worth knowing which rule your lender applies before you argue about it.
If you are the lender rather than the borrower, the same three variables are why manual interest calculation goes wrong so often, and why schemes are worth defining once in software instead of being worked out per loan at the counter.
Frequently asked questions
How is gold loan interest calculated in India?
Most lenders quote a monthly rate — 1.5% or 2% per month is common in the pawnbroking trade — and apply it either as simple interest on the principal, or compounded at a stated interval. The two variables that change the answer most are the rate basis (per month or per annum) and how a part month is treated.
What is the difference between simple and compound interest on a gold loan?
With simple interest, interest is calculated only on the original principal for the whole period. With compound interest, unpaid interest is added to the principal at the end of each compounding interval and then itself earns interest. Over six months the difference is small; over three years it is substantial.
How are part months treated?
This varies by lender and it matters. Three common conventions: a part month is rounded up to a complete month (the most common in the pawnbroking trade); interest is pro-rated for the extra days; or interest is calculated purely on actual days. The calculator supports all three so you can see the difference for your own scheme.
Is this calculator giving me a legally binding figure?
No. It is an estimating tool. Your actual interest depends on your lender's scheme, their part-period rule, any grace days, and charges outside interest. Always confirm against your own pledge slip and your lender's stated terms.
Can I use this on my own website?
Yes — you are welcome to link to this page from anywhere. If you run a gold loan business and want the calculation built into your own operations rather than done on a web page, that is what FinAcc does: schemes are set up once and every loan is computed automatically.
Running a gold loan business rather than taking one?
FinAcc lets you define simple, compound, multiple and custom slab schemes once — including your own part-period and grace-day rules — and then computes every loan automatically, posts it to your accounts and sends the customer their reminder. Used by 1000+ Indian businesses since 2008.
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