Can you borrow money against gold jewelry you already own? In many countries, especially India, gold loans are a common way to raise cash fast. The lender holds your gold and lends you part of its value.
The Gold Loan Calculator estimates how much you may be able to borrow. Enter the weight, the karat purity, the price per gram, and the lender's loan-to-value ratio. You get the eligible loan amount, the value of the pure gold, and the pure gold weight.
Table of Contents
- What the Calculator Does
- How to Use It, Step by Step
- The Gold Loan Formula
- Worked Example
- How to Read the Results
- What Changes Your Loan Amount
- Limitations and Assumptions
- FAQs About the Gold Loan Calculator
What the Calculator Does
The tool appears on the page as the Gold Loan Eligibility & Valuation Calculator. It runs once on load with sample numbers, and the button refreshes the results.
- Eligible Loan Amount: the most a lender might lend at your chosen ratio.
- Pure Gold Value (at 24K Price): the value of the pure gold in your items at your price.
- Effective Pure Gold Weight: how many grams of pure gold your items contain.
- Three purity choices: 24/24 = 100%, 22/24 = 91.67%, and 18/24 = 75%.
- Input checks: a blank or out-of-range box shows a short message and N/A.
The tool does not work out interest, monthly payments, or a repayment schedule. It only estimates the loan size.
How to Use It, Step by Step
- Enter the total weight of your gold items in Gold Weight (Grams). Use at least 1 gram, and the sample is 50 grams.
- Pick the karat in Gold Purity (Karat). The sample is 22 Karat (22/24 = 91.67%).
- Enter a price of at least $1 in 24K Gold Price per Gram ($). The sample is $75.
- Enter the lender's ratio in Loan-To-Value Ratio (%). It must be 1 to 90, and the sample is 75.
- Press Calculate Gold Loan Amount to update the three result cards.
Gold prices change every day, and a hint under the inputs reminds you to use the pure 24K price. If your price is quoted per troy ounce, divide it by about 31.1 to get grams.
The Gold Loan Formula
The math has three steps. Find the pure gold, value it, then apply the lender's ratio.
Weight × Karat ÷ 24×Price per Gram×LTV ÷ 100=Eligible Loan
- Pure Gold Weight = Gold Weight × (Karat ÷ 24). Pure gold is 24 karat.
- Pure Gold Value = Pure Gold Weight × 24K Gold Price per Gram.
- Eligible Loan Amount = Pure Gold Value × (LTV ÷ 100).
So 22 karat counts as 22 ÷ 24, or about 91.67% pure. 18 karat counts as exactly 75%.
Worked Example
Anjali needs cash for a car repair. She has 40 grams of 22 karat jewelry. She uses an example price of $80 per gram and a 75% loan-to-value ratio.
| Step | Calculation | Output |
|---|
| Pure gold weight | 40 × 22 ÷ 24 | 36.67 Grams |
| Collateral value | 36.667 × $80 | $2,933.33 |
| Eligible loan | $2,933.33 × 0.75 | $2,200.00 |
Purity makes a large difference. With the same 40 grams, price, and ratio, here is how karat changes the result.
| Purity | Pure Gold | Collateral Value | Eligible Loan |
|---|
| 24 Karat | 40.00 Grams | $3,200.00 | $2,400.00 |
| 22 Karat | 36.67 Grams | $2,933.33 | $2,200.00 |
| 18 Karat | 30.00 Grams | $2,400.00 | $1,800.00 |
How to Read the Results
Eligible Loan Amount is a ceiling, not an offer. A lender may approve less after testing your gold.
Pure Gold Value (at 24K Price) is what the pure gold is worth at your price. It ignores the value of design, stones, or labor in the jewelry.
Effective Pure Gold Weight shows how much real gold sits inside your items. The ratio here works like any loan-to-value figure, which our loan-to-value calculator explains for homes and cars.
What Changes Your Loan Amount
Lenders may weigh only the gold and leave out stones, clasps, or other metals. That can make your net weight lower than the scale shows at home.
The price the lender uses may also differ from the market price you see online. If you know a price in another currency, the currency converter helps you switch to dollars.
Before you borrow, compare the full cost. Check the yearly rate of a gold loan with the loan interest rate calculator. Then weigh the monthly cost against an unsecured option using the personal loan calculator.
Gold loans often fill a short cash gap. Building a reserve with the emergency fund calculator can help you avoid one next time. More tools sit in the finance and business calculator hub.
Limitations and Assumptions
- The tool estimates loan size only. It does not show interest, fees, or a repayment plan.
- Purity is a simple karat ÷ 24 ratio. Real jewelry can test slightly above or below its stamped karat.
- The LTV box accepts only 1 to 90%. Any other value, or a blank box, shows a message and N/A.
- Weight below 1 gram or a price below $1 also shows N/A with a message.
- Lender rules on ratios, gold testing, and pricing vary. Treat every result as a rough estimate.
FAQs About the Gold Loan Calculator
What is a loan-to-value ratio on a gold loan?
It is the share of your gold's value that a lender will lend. At 75%, $1,000 of gold could support a loan of up to $750.
Why does karat matter so much?
Karat measures how much of an item is pure gold. Lower karat means more mixed metal, so less pure gold backs your loan.
Does the calculator show my monthly payment?
No. It only estimates how much you could borrow. Use a loan payment tool with your lender's rate and term to plan repayments.
What gold price should I enter?
Use a current quote for pure gold, not a store price for 22 karat pieces. A price that already reflects lower karat would cut your purity twice.
Are gold loans common in the US?
They are much more common in countries like India. In the US, a pawn loan against jewelry works in a similar way, though terms differ.
What happens if I cannot repay a gold loan?
The lender can usually sell the pledged gold to recover what you owe. Read the loan terms closely before you sign.
This calculator gives planning estimates only and is not financial advice. Reviewed for general accuracy by Prof. Dr. Khalil Mudassar, PhD.