Gold loan interest—often called byaj in India—depends on three core inputs: the principal amount you lend, the interest rate (usually quoted per month), and the time the loan stays open.
For simple interest, total interest over the period is proportional to principal × rate × time when your rate and time units align (for example, a monthly rate applied over a number of months). For compound interest, each period’s interest may increase the balance on which the next period’s interest is calculated, so totals can be higher than simple interest at the same nominal rate.
In practice, jewellers should match the calculator mode to the customer agreement: note whether you charge on the original pledge amount only, whether unpaid interest rolls into the balance, and how you count partial months or days. Our simple and compound calculators let you estimate both styles.
Always document the rate basis in writing, round amounts consistently, and reconcile with your ledger software. For portfolio-wide tracking, sign up for ByajBazaar to connect estimates to live loans and customers.