Trend of repeat gold loan borrowing rises again, signs of repayment stress observed

According to recent data released by TransUnion CIBIL, there has been an increase in the proportion of repeat borrowing among low-risk gold loan takers, while signs of stress in loan repayments are also being observed among some customers.

Between July 2023 and June 2025, among gold loan borrowers with a CIBIL score of 731 or more, 57% of customers who had taken loans of ₹2.5 lakh or less took a second gold loan within one year. For those taking loans of more than ₹2.5 lakh, this proportion was 54%. This repeat borrowing includes both loan renewals and top-ups.

Bhavesh Jain, Managing Director and CEO of TransUnion CIBIL, stated that lenders need to assess the overall financial liabilities of customers alongside the value of the pledged gold. He further added that for responsible lending and portfolio management, repayment history, frequency of borrowing, and changes in credit exposure across various products are extremely important.

This analysis included borrowers whose recent repayment record was clean and who had no active liquidity-linked credit products in the last six months. However, signs of stress are still visible. Among active gold loan borrowers with a healthy credit profile up to December 2025 and no past history of payment delays, 7% of customers experienced a delay of 30 days or more in their credit liabilities during the subsequent six months.

Borrowers who had missed more than one payment in the previous six months were three times more likely to default. Those who held business loans alongside gold loans were twice as likely to experience repayment stress. Nevertheless, the overall portfolio quality has improved, with the share of active borrowers having gold loan accounts overdue by 30 days or more decreasing from 2% in June 2025 to 1.4% in June 2026.

In India, outstanding gold loan dues reached ₹22.5 lakh crore in August 2026, which is nearly three times the amount in three years. The active borrower base has increased to 5.5 crore, with an average outstanding debt per borrower of ₹4.1 lakh. In the June 2026 quarter, the value of gold loan sanctions increased by 12% annually to ₹8.2 lakh crore, although a 15% decline in the volume of loans was noted. There was a 19% increase in the volume of loans above ₹2.5 lakh. Semi-urban and rural markets account for two-thirds of the total loan volume. The share of women was 40%, while Gen Z borrowers saw an annual increase of 19%.