Quick disbursal but be mindful of interest rates

Gold loans extended by commercial banks rose from ₹1.02 trillion in April 2024 to ₹2.23 trillion in April 2025, a year-on-year growth of 119.6 per cent, according to the Reserve Bank of India (RBI).

- SANJEEV SINHA

Prospective borrowers must understand the potential risks associated with these loans and carefully select their lender.

What makes them attractive Gold loans typically come with lower interest rates as they are secured by collateral. "They are accessible even to those with a limited or poor credit history," says Raoul Kapoor, co-chief executive officer (CEO), Andromeda Sales and Distribution. These loans now come with several other attractive features. "Traditionally, they were offered only as bullet loans. But now they come with several flexible repayment options," says Umesh Mohanan, executive director and CEO, Indel Money.

Swift disbursal makes them ideal for those in urgent financial need. "Once the gold is appraised and documentation is complete, the loan is typically disbursed within a few hours to a maximum of one or two working days," says Kapoor.