How Is Daily Interest Calculated on a Gold Loan?
The formula is: Daily Interest = (Principal × Annual Rate ÷ 100) ÷ 365
Most Indian banks use the 365-day convention. Some NBFCs use 360-day convention, which results in slightly higher daily interest. At ₹1,00,000 principal and 12% rate: Daily interest = ₹1,00,000 × 0.12 ÷ 365 = ₹32.88 per day.
Every extra day you hold the loan costs you this amount. Repaying on day 29 instead of day 31 saves you 2 × ₹32.88 = ₹65.76. These savings compound when you track daily interest on larger loans.
Why Should You Track Daily Interest on Your Gold Loan?
Knowing your per-day cost helps you: optimize repayment timing (close the loan before month-end), avoid interest traps on rolled-over bullet loans, and plan foreclosure on the cheapest day possible.
Weekend and holiday closures can add extra interest days — if your loan closes on a Friday vs Monday, that's 3 extra days of interest. For a ₹5L loan at 15%, that's ₹616 wasted.
Which Gold Loan Products Charge Daily Interest?
Overdraft/OD: Always daily on utilized amount — you pay only for what you use. Bullet: Daily accrual, typically debited monthly. EMI: Daily accrual built into the EMI formula but payments are monthly.
Use our Overdraft Calculator for OD-specific interest modeling, or the Bullet Repayment Calculator for interest-only loan costs.