Sri Lanka Pawning Calculator — Gold Loan Advance & Interest

Every Sri Lankan licensed bank computes a pawning advance the same way: weigh the gold, convert to a 22K-equivalent basis, value it against the day's 22K market rate, apply a loan-to-value ceiling, and bill simple interest on the resulting advance for the chosen tenure. Below is the bank-published formula, broken into six steps. The calculator above runs all six and shows each intermediate quantity.

1. Convert weight to grams.1 sovereign (පවුම) = 8.000 grams. So 5 sovereigns = 40 grams. Source: Sri Lanka Gem & Jewellery Authority hallmarking schedule.
2. Apply the purity factor to convert to a 22K-equivalent weight. Bank rates are always quoted per 22K sovereign (91.6% pure), so other carats are normalised first.
   • 22K → factor 1.0000
   • 21K → factor 0.9552 (87.5 / 91.6)
   • 18K → factor 0.8188 (75.0 / 91.6)
   • 24K → factor 1.0906 (99.9 / 91.6)
3. Compute the gold value.Market value (Rs) = (22K-equivalent grams / 8) × today's 22K rate per sovereign.
4. Apply the LTV ceiling.Maximum advance = market value × LTV %. State banks (BoC, People's, NSB) currently advance 80–85% of market value at 22K; private banks (HNB, Commercial, Sampath) typically settle 70–80%.
5. Compute interest (simple, not reducing-balance). Interest = advance × (annual rate / 100) × (tenure months / 12). Critically, this is not compounded — Sri Lankan banks bill interest on the full principal for the full tenure and the outstanding balance never drops until you redeem. If you redeem early, banks pro-rate by completed months, but most charge a one-month minimum.
6. Total due at redemption = advance + total interest. That is the cash you bring back to the counter on or before the tenure end date.

The Central Bank of Sri Lanka's Monetary Board periodically issues directions under the Banking Act and Monetary Law Act that cap state-bank pawning interest; the current state-bank rate cluster (13.0–13.5%) reflects the most recent direction in force. Private banks aren't bound to the same ceiling and price 100–200 bps higher. The calculator's bank presets are snapshot LTVs and rates, last verified on 2026-05-12.

The maximum-advance figure is also verified by a second, independent formula in the underlying module: advance = (22K rate × LTV%) × 22K-equivalent sovereigns. Both paths land on the same rupee at any set of inputs, and the calculator marks the result “Verified by per-sovereign method” when they agree.

The single input that moves the advance the most is the day's 22K rate per sovereign. If you don't know today's figure, work it out first with the Sri Lanka gold price calculator and paste the result into the rate field above — every downstream number scales linearly with it.

One distinction worth keeping straight: pawning interest is flat simple interest on the full advance, not the reducing-balance amortisation a personal loan or housing loan uses. A 12-month pawn at 13% costs the full 13% of the advance, whereas a reducing-balance loan at the same nominal rate costs roughly half that in real terms because the balance falls each month. If you are weighing a pawn against a term loan, model the loan separately in the Sri Lanka loan EMI calculator before deciding. And if you are pawning to park idle cash rather than to cover an emergency, compare the interest cost here against what the same gold's sale proceeds would earn in a fixed deposit.

The first 4examples are cross-checked against the calculator's per-sovereign cross-check and against an independent hand calculation recorded in lib/data/sri-lanka-pawning-calculator.ts (WORKED_EXAMPLES constant — 4cases, each within ± Rs 500 of the bank's own online calculator). The early-redemption case follows the same month-by-month schedule the tool prints below the results — interest is the monthly accrual multiplied by completed months.

The advance and interest this tool prints are the two numbers that decide whether a pawn is worth it, but a few smaller line items show up at the counter and are worth budgeting for. None of them change the arithmetic above; they sit on top of it.

• Documentation / service charge. State banks add a flat Rs 100–250 ticket charge per article. It is fixed, not a percentage, so it barely moves the cost on a large pawn but matters on a small one.
• Appraisal. In-house valuation is free at every state bank. The appraiser may discount stone-set or soldered pieces by eye — they weigh and deduct the non-gold portion, which the calculator cannot model. Bring the article to get the firm figure.
• Stamp duty and notices. If you let the tenure lapse, the registered-post default notice and any auction handling are billed against your redemption value before any surplus is returned to you.
• Insurance / safe-keeping. Built into the published rate at the state banks; a handful of private lenders quote it separately, so confirm whether the rate you were told is all-in.

Because pawning bills flat simple interest, the effective cost of a short pawn that you redeem on time is genuinely low — far cheaper than a credit-card cash advance or an informal lender. Where it turns expensive is the lapse: missing the redemption window triggers the grace period, then auction, and you lose the spread between your gold's market value and the advance you took. The whole point of the month-by-month schedule the tool prints is to let you pick the shortest tenure you can realistically meet.

Pawning keeps your gold; selling does not. If you expect to repay within the tenure and you want the jewellery back — a common case for heirloom or wedding gold in Sri Lanka — a pawn is usually the cheaper way to raise short-term cash than an unsecured loan, because the gold collateral lets the bank price the facility low. Run the same amount through the EMI calculator to see the reducing-balance equivalent before you decide.

If you have no intention of redeeming, selling outright almost always beats letting a pawn lapse to auction, because at auction you only recover the surplus above the bank's dues, net of charges. And if the question is the reverse — you are sitting on gold and idle cash and wondering which to deploy — compare the pawning interest you would pay here against the yield the cash would earn in a fixed deposit. The right move depends on the gap between the two rates, which both tools make explicit.

• Bank of Ceylon — Pawning page
• People's Bank — Pawning page
• National Savings Bank — Pawning page
• Hatton National Bank — Pawning page
• Commercial Bank — Pawning page
• Sampath Bank — Pawning page
• Central Bank of Sri Lanka — Statutes administered by CBSL (Monetary Board directions on pawning interest)
• Sri Lanka Gem & Jewellery Authority — sovereign weight and carat purity standards

Each bank's snapshot LTV and rate were cross-checked against the bank's own published pawning page on 2026-05-12. The CBSL statutes register is reviewed quarterly. Gold rates move daily and must be confirmed at the counter on the day you pawn.