Gold loans in India have witnessed an unprecedented rise this year, emerging as one of the fastest-growing segments in personal lending. According to the Reserve Bank of India’s (RBI) latest data, the outstanding gold loan portfolio has jumped 128.5% year-on-year, reaching ₹3.38 lakh crore by October 2025. When compared to March 2025, this shows a massive increase of 63.6%, signaling a sharp surge in household borrowing against gold ornaments.
Interestingly, gold loans now account for nearly one-fourth of the total rise in personal loans over the past 12 months, highlighting how strongly Indian consumers are leaning on gold assets for quick liquidity. Personal loans, too, have seen significant momentum, growing 14% to touch ₹64.56 lakh crore by the end of October.
Why Are Gold Loans Rising So Quickly?
RBI attributes the sudden spike in gold loan demand to a key regulatory change introduced in May 2024. Loans provided against gold jewellery for agricultural and farming purposes were reclassified into the retail gold loan category, leading to a visible expansion in numbers.
Another reason for the sharp rise is the broader trend of consumers preferring secured loans, especially during periods of financial stress or tightening credit norms. Gold loans offer fast approval, minimal documentation, and lower interest rates compared to unsecured credit, making them a preferred choice for middle-income households.
Secured loan growth has been strong across categories:
-
Housing loans rose by 11%, reaching ₹31.87 lakh crore.
-
Auto loans grew 12.5% to ₹6.77 lakh crore.
-
Education loans recorded an impressive 14.7% jump and now stand at ₹1.49 lakh crore.
These numbers indicate that consumers continue to borrow actively for essential needs, but they are increasingly shifting toward loans backed by collateral.
Unsecured Loan Growth Slows Down
In contrast, unsecured loan segments have shown relatively muted growth. The RBI data reveals:
-
Consumer durable loans increased by only 1%, reflecting cautious borrowing for lifestyle-driven purchases.
-
Credit card outstanding grew 7.7% to ₹3.03 lakh crore, slower than previous years.
-
Other unsecured personal loans rose 9.9%, reaching ₹16.17 lakh crore.
The sharp contrast between secured and unsecured loan growth signals a change in consumer behavior. Indians appear to be relying more on assets like gold to raise funds rather than taking high-interest unsecured debt.
Overall, the strong demand for loans pushed total bank lending to ₹193.9 lakh crore by October 2025, marking an 11.3% annual growth.
Also read: Gold Import Rules 2025: How Much Gold You Can Bring From Dubai to India Without Duty
Service Sector Drives Credit Growth in Non-Retail Segment
Beyond personal loans, the non-retail sector also saw healthy credit expansion, with the service sector leading the growth story. Loans to services grew 13%, touching ₹53.45 lakh crore.
Major segments that witnessed rapid credit expansion include:
-
Computer software companies
-
Shipping sector
-
Commercial real estate developers
Non-banking financial companies (NBFCs) also continued to receive strong support from banks. Loans extended to NBFCs rose 10.9%, reaching ₹17.04 lakh crore.
This reinforces NBFCs’ crucial role in distributing credit across India, especially in rural and semi-urban markets.
The steep rise in gold loans reflects India’s economic realities—where gold remains a trusted financial asset, especially during uncertain times. With secured loans dominating credit growth and households increasingly leveraging their gold holdings, the trend suggests that gold will continue to play a central role in India’s personal finance landscape.
