Common man takes more and more loans by mortgaging gold to meet his financial needs. According to RBI’s Loan to Value Report, the number of people taking gold loans has increased by 35% in the last 5 years and around 2,200 tonnes of gold has been pledged. Amid rising gold prices, people are using jewelery as a means of accumulating money. Gold loans are becoming an option for business needs, household expenses and sudden financial problems. However, if the loan is not repaid, people may lose their pledged gold.

Gold in India is not limited to jewelery and investment, but is also an excellent means of raising money in times of need. Loans can be taken from banks and NBFCs by pledging gold held in households. Due to the increase in the price of gold, the cost of jewelery has also increased. This has made it possible for them to get more loans in return. This is also an important reason behind the growing demand for gold loans.

How much gold is in Indian homes, how much is it worth?

• 35 thousand tons of gold in houses: According to 2026 data from the National Institute of Securities Markets (NISM), Indian households hold about 35,000 tonnes of gold. A 2020 NITI Aayog report put the figure at around 23,000 tonnes. This shows how huge gold reserves Indian families have.
• 445 lakh crore worth: The total value of gold held in Indian households is estimated to be around Rs 445 lakh crore. About Rs. 326 lakh crore is more than GDP. A rise in gold prices also increases the total value of gold held in households.
• 5,250 tonnes of gold yielded in 7 years: Between 2020 and 2026, about 5,250 tonnes of gold came to India. About 3,450 tonnes of gold was used to make jewellery. At the same time, the RBI bought around 335 tonnes of gold for its gold reserves during the same period. This shows that domestic purchases and investment play an important role in the demand for gold in the country.
• Increase in expenditure on jewellery: Spending on jewelery increased by nearly 26% from January to June to Rs. 1.76 lakh crores. Despite the increase in gold prices, the total expenditure on jewelery increased. Due to higher prices, consumers may have to spend more than before even buying small amounts of gold.

Why is gold loan currency increasing?

1. If the price of gold increases, the loan available on the same jewelery also increases – According to the World Gold Council, domestic gold prices in India were up nearly 60% year-on-year in June 2026. Due to the increase in price, the value of the gold pledged increased and it became possible for people to take more loans against the same gold.

2. Option to raise money without selling gold- Families often consider gold as their savings and security for the future. In such a situation, instead of selling the jewellery, one can choose to collect money by mortgaging it. Along with this, the option remains to withdraw the gold after repaying the loan after the requirement is met.

3. Easier option than personal loan- In a gold loan, gold is pledged, so the lending institution has security. SBI also describes its gold loan as a paper-less option. However, the interest rate and loan approval terms vary depending on the bank and type of loan.

4. Small Loan Relief from RBI Regulations- Under RBI’s gold loan rules of 2025, a loan of up to Rs 2.5 lakh can be given in eligible cases up to a maximum of 85% of the admissible value of gold. Along with this, small borrowers can get more amount in return for their pledged gold.

5. Banks and NBFCs are also increasing gold loans- The growing gold loan market is not just a story of consumer demand. Lending institutions are also expanding in this segment. ICRA predicted in October 2025 that the structured gold loan market will grow rapidly amid higher prices and slower growth of unsecured loans, and recent data points to this trend.