Rising Gold Prices Lead to Significant Rise in Gold Loans
While credit supply eased following festive demand and GST-related momentum, the moderation reflects seasonal trends rather than a structural slowdown, the report added.
Mumbai:Rising gold prices are leading to a significant expansion in gold loans, contributing to healthy retail credit growth in the post-festive period. According to a report by India’s largest credit bureau, TransUnion CIBIL,gold loans have emerged as the leading segment in India’s retail credit market, accounting for loan volumes at 36 per cent and around 40 per cent by value, driven by rising gold prices and increasing consumer preference for secured borrowing.
The surge has been supported by a sharp increase in ticket sizes, with the average gold loan amount rising significantly over the past two years to around Rs 1.9 lakh in the December 2025 quarter.
"The average ticket size for the three months ended December 2025 stands at Rs 1.9 lakh. Gold loans now represent the largest share by volume (36 per cent) and value (39 per cent) among all retail loan categories, accounting for more than one-third of the total retail loan supply. In terms of outstanding balances, gold loans are now second only to housing loans," said the report.
From a geographic and demographic perspective, gold loans are expanding beyond their traditional concentration in southern states and are seeing higher growth in northern and western states. For instance, as of December 2025, the three states with above-average YoY growth rates in gold loan origination volumes were Uttar Pradesh (96 per cent), Madhya Pradesh (80 per cent), and Rajasthan (79 per cent).
Additionally, more than half (54 per cent) are being utilised by prime and above consumers, indicating a more diverse credit profile. This trend also highlights the growing acceptance of gold loans as a mainstream retail credit product.
The report also noted that the Consumer Market Indicator (CMI)—a major gauge of credit market health—rose to 102 in the December 2025 quarter, up from 97 a year ago and 100 in the preceding September quarter, which is the third consecutive quarter of improvement.
The report noted that while credit supply eased following festive demand and GST-related momentum, the moderation reflects seasonal trends rather than a structural slowdown.
Demand for credit remained strong, particularly in semi-urban and rural areas, with non-metro regions accounting for 54 per cent of the total borrower base, up three percentage points year-on-year. The share of new-to-credit consumers also increased to 15 per cent.
Meanwhile, auto loans saw stable volumes during the post-festive period, supported by demand in the affordable mid-segment category, while supply in the segment rose on a daily average basis compared to the previous year.
