Gold loan business in India is seen growing rapidly in the financial year 2026. Due to rising gold prices and easy loan facilities, people are increasingly moving towards gold loans. According to a report by Experian, new gold loans increased by 115 percent to Rs 7.6 lakh crore in the fourth quarter of FY26. At the same time, the total gold loan AUM i.e. Asset Under Management increased by 47 percent to Rs 11.9 lakh crore. Experts say that gold loan has become the fastest growing secured loan sector in FY26. People are now giving preference to gold loan to get money quickly without much paperwork.
Average loan size increased
According to the report, the average ticket size of gold loan has also increased rapidly. While an average gold loan of Rs 1 lakh was being taken in FY24, it increased to Rs 1.7 lakh in FY26. Although home loan still remains the largest loan category, with an average size of around Rs 33.5 lakh, gold loan has gone much ahead in terms of growth.
Gold loan increased more than personal loan
The rising prices of gold have made gold loans more powerful. Since it is a mortgage based loan, banks and NBFCs also consider it safe. For this reason, gold loan has left behind unsecured loans like personal loan and credit card. According to the report, the share of NBFC companies was 28 percent in the fourth quarter of FY25, which increased to 40 percent in the fourth quarter of FY26. At the same time, the share of government banks has come down to 34 percent. Private banks have increased their focus on gold loans of more than Rs 3 lakh. Besides, improvement has also been seen in the default rate.
Why is the demand for gold loan increasing?
According to Dr. Renisha Chainani, Research Head of Augmont, there are many reasons behind the boom in the gold loan market. The biggest reason is the record high prices of gold, due to which customers are able to get more loans. On the other hand, Reserve Bank of India (RBI) has increased the strictness on unsecured loans, due to which people are moving towards secured loans.
RBI has recently increased the Loan-to-Value (LTV) limit to 85 percent on gold loans up to Rs 2.5 lakh. More people are getting gold loan easily.
The market may become bigger by FY27
Experts estimate that the organized gold loan market could reach Rs 18 lakh crore by FY27. However, increasing NPAs and possible tightening of rules may affect the pace of this growth in the future. At present, amidst rising inflation and need of money, gold loan is fast becoming an easy financial option for the common people.
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