Driven by a surge in gold prices, outstanding loans against gold jewellery have recorded triple-digit growth since February 2025, far outpacing overall bank credit expansion, according to RBI’s State of the Economy report for December 2025.
Loans against gold jewellery rose 128.5 per cent year-on-year to ₹3.38 lakh crore during Feb.–Oct. for banks, the data said.
“Notably, loans against gold jewellery have surged and continued to record triple-digit growth rates since February 2025. The sharp expansion may be attributed to a surge in gold prices,” said the RBI.
The uptrend continues to be supported by elevated geopolitical risks, steady central-bank accumulation, and persistent safe-haven demand.
This expansion nearly doubled gold loans’ share in total non-food credit. The share of gold loans in the overall non-food credit was 1.8 per cent in October 2025, relative to 0.9 per cent in October 2024. Share of gold loans in personal loans stood at 5.2 per cent in October 2025.
Why Gold Loans Are Gaining Preference
The Reserve Bank of India (RBI) report further attributes the surge to a combination of high gold prices, softer interest rates, and easy accessibility of gold-backed credit compared with unsecured personal loans.
Unlike personal loans or credit cards, gold loans carry lower interest rates and quicker disbursal, making them suitable for meeting working capital needs, seasonal expenses, or emergency consumption.
A gold loan is a secured loan in which a borrower pledges gold as collateral. Interest rates typically range between 9–15 per cent, compared with 24–48 per cent for personal loans, highlighting why borrowers increasingly prefer gold-backed financing.
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