Gold Loan Defaults Nearly Double in Five Months as Outstanding Loans Hit ₹22.5 Lakh Crore

India`s gold loan market is witnessing rapid growth, but rising overdue payments are beginning to signal financial stress among borrowers. Gold loans overdue for more than 90 days have nearly doubled in five months, even as the total outstanding loan amount has tripled over the past three years.

According to TransUnion CIBIL`s November 2026 report, Lending Unlocked: Gold Loans, loans overdue by more than 90 days accounted for 0.3% of the total gold loan portfolio in August 2026, compared with 0.2% in March 2026.

Meanwhile, outstanding gold loans reached a record ₹22.5 lakh crore in August 2026, marking a threefold increase from August 2023.

Gold Loan Market Reaches Record ₹22.5 Lakh Crore

The rapid expansion of gold-backed lending highlights the growing importance of gold loans in India`s credit market.

Gold loans allow individuals to obtain funds by pledging their gold jewellery or other eligible gold assets as collateral. They are commonly used to meet personal expenses, business requirements, medical emergencies and other financial needs.

The latest figures indicate that more money is being borrowed against gold, although the increase in overdue loans suggests that some borrowers are finding it difficult to repay their dues on time.

Gold Loan Sanctions Rise 12% Despite Fewer New Loans

TransUnion CIBIL reported that the total value of gold loans sanctioned increased by 12% year-on-year to ₹8.2 lakh crore during the three months ended June 2026.

Interestingly, the number of newly originated loans declined by 15% during the same period.

Around 3.7 crore gold loans were disbursed, while the number of unique borrowers remained broadly stable at 2.4 crore.

This difference between loan value and loan volume indicates that borrowers are increasingly taking larger-ticket loans rather than the market experiencing a decline in borrower participation.

In other words, fewer new loans are being originated, but the overall amount sanctioned has increased.

Gen Z Borrowers Show Growing Interest in Gold Loans

Another important finding from the report is the increasing participation of younger borrowers in the gold loan market.

According to Bhavesh Jain, Managing Director and CEO of TransUnion CIBIL, the number of Gen Z borrowers increased by 19% over the preceding five months.

This indicates growing participation among younger consumers in gold-backed borrowing.

Rising Defaults Highlight the Need for Careful Borrowing

The increase in overdue gold loans comes at a time when outstanding balances are reaching record levels. Although the share of loans overdue by more than 90 days remains relatively small at 0.3%, its rise from 0.2% within five months deserves attention.

As India`s gold loan market continues to expand, borrowers should carefully assess their repayment capacity before pledging jewellery.

The latest TransUnion CIBIL findings highlight two important developments: increasing demand for larger gold loans and early signs of repayment stress in this rapidly growing lending segment.