India’s gold loan market has nearly tripled in size over three years, with outstanding balances touching ₹22.5 lakh crore in August 2026, as more consumers turn to gold-backed borrowing and existing borrowers return for additional loans.
However, the growth is being driven by larger-ticket loans rather than a rise in the number of people entering the market.
According to TransUnion CIBIL’s report, Lending Unlocked: Gold Loans, released on November 5, the number of active gold loan borrowers stood at 5.5 crore as of August 2026. They accounted for 21% of India’s credit-active consumers, with an average outstanding balance of ₹4.1 lakh per borrower.
The shift towards higher-value borrowing is also visible in loan disbursement trends. Gold loan sanction values rose 12% year-on-year (YoY) to ₹8.2 lakh crore during the three months ended June 2026, even as origination volumes declined 15%. Around 3.7 crore gold loans were disbursed during the period, while the number of unique borrowers remained broadly stable at 2.4 crore.
Loans exceeding ₹2.5 lakh recorded a 19% YoY increase in origination volumes, indicating that borrowers are increasingly opting for larger loan amounts against their gold.
Repeat borrowing remains a key driver
The report also highlights how frequently borrowers return to gold-backed credit. More than one in two low-risk borrowers who took a gold loan between July 2023 and June 2025 borrowed again within the following 12 months.
Among borrowers who took loans of ₹2.5 lakh or less, 57% originated another gold loan within a year. The corresponding share stood at 54% among those who borrowed more than ₹2.5 lakh.
For comparison, repeat borrowing was lower across other liquidity-oriented credit products, including personal loans, credit cards and unsecured business loans.
Low-risk borrowers in the analysis were defined as those with a CIBIL Score of 731 or above, no loans that were 30 or more days past due in the preceding six months and no active liquidity-oriented credit products.
Rural markets and women account for a significant share
Gold-backed borrowing is also expanding beyond its traditional borrower base. Two-thirds of gold loan originations during the April-June 2026 quarter came from semi-urban and rural markets, while women accounted for two in five originations.
The number of Gen Z borrowers grew 19% YoY. Borrowers with a CIBIL Score above 800 accounted for 40% of the market, up four percentage points from the quarter ended June 2023.
While southern states continue to form the foundation of India’s gold loan market, growth has increasingly come from other regions, pointing to wider adoption of gold-backed credit.
42% of borrowers with prior credit stress return to regular repayment
The report also examined repayment behaviour among borrowers who had shown signs of credit stress before taking a gold loan.
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Among borrowers who took gold loans of ₹2.5 lakh or less, 29% had at least one existing credit obligation that was 30 or more days past due in the month before loan origination. The corresponding share was 27% among those taking loans above ₹2.5 lakh.
However, two in five (42%) of these previously delinquent gold loan borrowers were current on all their active credit obligations 12 months later. This was higher than the corresponding proportions recorded for other liquidity-oriented credit products.
TransUnion CIBIL clarified that the analysis does not establish whether borrowers used the gold loan proceeds to repay existing dues or whether taking the loan directly influenced their subsequent repayment behaviour. The findings reflect an observed borrower-level repayment pattern rather than a causal relationship.
Delinquency rates decline, but certain borrowers remain vulnerable
Gold loan repayment performance has improved over recent quarters. The proportion of active borrowers with gold loan accounts that were 30 or more days past due fell from 2% in June 2025 to 1.4% in June 2026. During the same period, the number of active gold loan borrowers increased from 4.8 crore to 5.4 crore.
However, the report identified certain early warning indicators. Among five crore active gold loan borrowers analysed in December 2025, 7% experienced delinquency across their credit obligations between January and June 2026.
Borrowers who had missed more than one payment in the preceding six months were three times more likely to experience delinquency in the subsequent six months. The risk was twice as high among those holding business-oriented loans alongside gold loans and 1.4 times higher among borrowers with non-mortgage outstanding balances of ₹5 lakh or more.
The findings suggest that while gold loans are reaching a wider borrower base and repeat borrowing remains strong, lenders need to assess borrowers’ existing debt and repayment capacity alongside the value of the gold pledged.
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