Gold Loans Up 66%: Are You Paying Too Much?

NBFCs gave out 66% more gold loans this year, reaching ₹3.74 trillion. More borrowers are pledging gold jewellery for quick cash — but regulators are watching risky lending patterns closely.

Here's what happened: Outstanding gold loans at NBFCs jumped 66.1% year-on-year to ₹3.74 trillion by September, making it the fastest-growing retail lending segment.. Regulators raised a red flag: a significant portion of new gold loans is being disbursed to borrowers who already have overdue loans on their credit records.. NBFCs dominate quick gold lending in India, often charging 12–29% interest annually — far higher than banks — with the right to auction pledged jewellery on default..

What you should do: Check your gold loan's Loan-to-Value (LTV) ratio immediately — if it's above 75%, your lender can demand a top-up or sell your jewellery without warning if gold prices fall.. Compare your NBFC gold loan interest rate against your nearest bank or cooperative bank — switching could save ₹800–₹2,000 per month on a ₹2 lakh loan.. Avoid pledging gold to clear an existing overdue loan — regulators are scrutinising this pattern, and stacking debt on bad debt puts your jewellery at serious auction risk..

If you repay your NBFC gold loan early, demand a written release letter and physically verify your jewellery weight and purity before leaving the branch — shortfalls are hard to dispute later.

If this affects your borrowing choices, compare current personal loan options from 100+ lenders on GoCredit.