Gold Loan Repeat Borrowing Grows Among Low‑Risk Borrowers, Repayment Stress Remains

More than half of low‑risk gold‑loan borrowers took another loan within a year, even as signs of repayment stress linger. Among borrowers with CIBIL scores of 731 or higher who got gold loans between July 2023 and June 2025, 57% of those who borrowed ₹2.5 lakh or less took a second loan within 12 months. For borrowers whose loan amount was above ₹2.5 lakh, the repeat rate was 54%. The repeat borrowing includes both renewals and top‑ups. Bhavesh Jain, managing director and CEO of TransUnion CIBIL, said lenders must look at a borrower’s total financial obligations as well as the value of the pledged gold. He added that repayment history, repeat borrowing and shifts in credit exposure across products are key for responsible lending and portfolio management. The analysis covered borrowers with clean recent repayment records and no active liquidity‑oriented credit products in the prior six months. Nevertheless, 7% of active gold‑loan borrowers with healthy credit profiles as of December 2025 faced a delay of 30 days or more on any credit obligation in the next six months. Borrowers who missed more than one payment in the previous six months were three times as likely to become delinquent. Those who also held business‑related loans were twice as likely to show repayment stress. Overall portfolio quality improved, with the share of gold‑loan accounts overdue by at least 30 days falling from 2% in June 2025 to 1.4% in June 2026. India’s outstanding gold‑loan balances hit ₹22.5 lakh crore in August 2026, almost three times the level three years earlier. The active borrower base grew to 5.5 crore and the average outstanding debt per borrower was ₹4.1 lakh. Gold‑loan sanction values rose 12% year‑on‑year to ₹8.2 lakh crore in the June 2026 quarter, even though loan origination volumes fell 15%. Loans above ₹2.5 lakh saw a 19% rise in volume. Semi‑urban and rural markets generated two‑thirds of originations, women accounted for 40% of borrowers and Gen Z borrowers grew 19% year‑on‑year.

Context

Gold loans are secured by physical gold and are a major source of credit for many Indian households. Rising balances show strong demand but also increase the need for careful credit assessment.