As gold loans surge, so have delinquencies among borrowers with bigger amounts, finds study
Based on the study for gold loans originated in the six months ended June 2025 by TransUnion CIBIL, overall delinquency was 1.1 per cent.
- Apr 15, 2026,
- Updated Apr 15, 2026 8:30 AM IST
Over the last couple of years, gold loans have gained massive traction as the price of the precious metal surged. However, delinquency rates among borrowers availing bigger loans also seems to have risen, something that the industry and the regulator may be closely watching how the trend pans out over time.
Borrowers whose post-origination gold loan outstanding amount exceeded Rs 2.5 lakh showed a delinquency incidence of 1.5 per cent, about 2.2 times that of borrowers with lower exposure at 0.7 per cent, according to a study by TransUnion CIBIL.
Based on the study for gold loans originated in the six months ended June 2025, overall delinquency was 1.1 per cent.
Delinquency is measured as any trade reported as 60 days past due within six months of origination.
Borrowers with a history of serious delinquency who subsequently rely on gold loans face a significantly higher risk of disengagement from the formal credit system, according to TransUnion CIBIL. Their credit-access closure rate was around 1.6 times higher than that of non-defaulting borrowers, suggesting that for a section of stressed borrowers, gold loans may increasingly be functioning as a product of last resort, it said.
"As the gold loan segment expands, lenders’ priority must be to balance growth with prudence," said Bhavesh Jain, MD and CEO, TransUnion CIBIL.
DON'T MISS | Gold loans surge 3.8x since 2022; average borrower exposure jumps to ₹3.1 lakh
"Collateral strength remains important, but it cannot be the sole criterion for evaluating borrowers. Lenders will need to assess total borrower indebtedness, repayment capacity, recent credit behaviour and cross-lender exposure more holistically," Jain noted.
Gold Loans Surge
Over 2024 and 2025 gold prices surged as demand for the safe haven asset rose amid global geopolitical uncertainties. That drove demand for gold loans.
Typically, higher gold prices increase the valuation of the gold pledged and thus allows borrowers get a higher loan. In case a borrower defaults, the pledged gold is auctioned off by the lender to recover the amount.
Gold loan balances have grown 3.8 times since March 2022, with their share in India’s retail credit portfolio rising from 5.9 per cent to 11.1 per cent by December 2025, according to TransUnion CIBIL.
The average gold loan balance per account increased from Rs 1.1 lakh in March 2022 to Rs 1.9 lakh in December 2025, the study pointed.
"The segment is drawing more borrowers with stronger credit profiles, larger ticket sizes and repeat usage. This is an indication that gold loans are no longer being used only for short-term liquidity needs but are becoming part of broader household borrowing behaviour, " said Jain.
The average ticket size rose from Rs 90,000 in the first quarter of 2022 to Rs 1.96 lakh in the fourth quarter of 2025, indicating that the market is not only widening in reach but also moving toward higher-value borrowing, said TransUnion CIBIL.
Non-banking finance companies increased their share of gold loan balances from 7 per cent in March 2022 to 11 per cent in December 2025, according to the study. Public sector banks increased their share from 57 per cent to 62 per cent over the same period.
Over the last couple of years, gold loans have gained massive traction as the price of the precious metal surged. However, delinquency rates among borrowers availing bigger loans also seems to have risen, something that the industry and the regulator may be closely watching how the trend pans out over time.
Borrowers whose post-origination gold loan outstanding amount exceeded Rs 2.5 lakh showed a delinquency incidence of 1.5 per cent, about 2.2 times that of borrowers with lower exposure at 0.7 per cent, according to a study by TransUnion CIBIL.
Based on the study for gold loans originated in the six months ended June 2025, overall delinquency was 1.1 per cent.
Delinquency is measured as any trade reported as 60 days past due within six months of origination.
Borrowers with a history of serious delinquency who subsequently rely on gold loans face a significantly higher risk of disengagement from the formal credit system, according to TransUnion CIBIL. Their credit-access closure rate was around 1.6 times higher than that of non-defaulting borrowers, suggesting that for a section of stressed borrowers, gold loans may increasingly be functioning as a product of last resort, it said.
"As the gold loan segment expands, lenders’ priority must be to balance growth with prudence," said Bhavesh Jain, MD and CEO, TransUnion CIBIL.
DON'T MISS | Gold loans surge 3.8x since 2022; average borrower exposure jumps to ₹3.1 lakh
"Collateral strength remains important, but it cannot be the sole criterion for evaluating borrowers. Lenders will need to assess total borrower indebtedness, repayment capacity, recent credit behaviour and cross-lender exposure more holistically," Jain noted.
Gold Loans Surge
Over 2024 and 2025 gold prices surged as demand for the safe haven asset rose amid global geopolitical uncertainties. That drove demand for gold loans.
Typically, higher gold prices increase the valuation of the gold pledged and thus allows borrowers get a higher loan. In case a borrower defaults, the pledged gold is auctioned off by the lender to recover the amount.
Gold loan balances have grown 3.8 times since March 2022, with their share in India’s retail credit portfolio rising from 5.9 per cent to 11.1 per cent by December 2025, according to TransUnion CIBIL.
The average gold loan balance per account increased from Rs 1.1 lakh in March 2022 to Rs 1.9 lakh in December 2025, the study pointed.
"The segment is drawing more borrowers with stronger credit profiles, larger ticket sizes and repeat usage. This is an indication that gold loans are no longer being used only for short-term liquidity needs but are becoming part of broader household borrowing behaviour, " said Jain.
The average ticket size rose from Rs 90,000 in the first quarter of 2022 to Rs 1.96 lakh in the fourth quarter of 2025, indicating that the market is not only widening in reach but also moving toward higher-value borrowing, said TransUnion CIBIL.
Non-banking finance companies increased their share of gold loan balances from 7 per cent in March 2022 to 11 per cent in December 2025, according to the study. Public sector banks increased their share from 57 per cent to 62 per cent over the same period.