Unlocking Value with Gold Loans in India

Gold has been an integral part of India’s cultural and economic fabric for centuries. From wedding jewelry to festive gifts, households across the country treat gold as both an adornment and a store of value. In recent years, gold loans have emerged as a popular financing option, allowing individuals and small businesses to unlock liquidity without selling their precious assets.

The Heritage of Gold in India

Gold occupies a unique place in Indian society. It is not merely a commodity; it represents family heritage and financial security. During weddings and festivals alike, gold purchases surge, reflecting trust in the metal’s enduring worth. Rural families often regard gold ornaments as an emergency fund, to be monetized in times of need.

Also read - How Indian Lenders Are Upgrading Their Collections Through Smarter Systems

Understanding Gold Loans

A gold loan is a secured lending product where borrowers pledge their gold jewelry or coins as collateral. Unlike unsecured credit, gold loans typically offer higher loan-to-value ratios, competitive interest rates, and quicker disbursal times. Lenders assess the purity and weight of the pledged gold, advancing funds at up to 75–90% of its market value.

Poonawalla Fincorp Enters the Gold Loan Market

Poonawalla Fincorp


Poonawalla Fincorp, part of the Cyrus Poonawalla Group, recently expanded its secured lending portfolio by introducing gold loans. As of June 2025, the NBFC operates across 18 states and two union territories, with an AUM of ₹35,550 crore. The company plans to open 400 new branches over the next four quarters, focusing on Tier 2 and Tier 3 cities. This strategic move aims to provide accessible credit solutions to underserved communities, offering flexible repayment options and secure asset handling.

Comparing Offerings: SBI and HDFC Bank

While Poonawalla Fincorp’s entry into the gold loan segment adds another reliable lender, established banks such as State Bank of India (SBI) and HDFC Bank have long-standing gold loan programs:

  • State Bank of India: SBI’s gold loan scheme offers up to 75% of pledged gold value at competitive interest rates starting as low as 7.10% per annum. Repayment tenures range from three months to five years, with options for bullet repayment or EMI-based plans.

  • HDFC Bank: HDFC Bank provides gold loans against hallmarked jewelry with loan-to-value ratios up to 75%. Interest rates begin at 7.50% per annum, and customers can choose between monthly interest payment or EMI options.

By evaluating loan-to-value ratios, processing fees, and repayment flexibility, borrowers can select the lender that best suits their financial needs.

Also read - Poonawalla Fincorp Unveils New Loan Offering for Small Shopkeepers

Advantages of Gold Loans for Borrowers

Gold loans offer several benefits compared to alternative credit products:

  • Speedy Approval: Minimal documentation and online processing mean funds can be disbursed within hours.

  • Lower Interest Rates: Secured nature of gold loans translates into rates often lower than unsecured personal loans.

  • Flexible Repayment: Borrowers can choose from bullet payments, EMIs, or interest-only plans, matching cash flow cycles.

  • No Impact on Credit Score: Since the loan is collateralized, approval is more accessible even for those with modest credit histories.

Catering to Underserved Markets

Poonawalla Fincorp’s branch expansion focuses on Tier 2 and Tier 3 cities, where banking infrastructure can be sparse. Local branches enable borrowers to access gold loans at the neighborhood level, reducing travel costs and paperwork delays. Moreover, by targeting individuals who rely on gold assets rather than formal credit histories, the NBFC strengthens financial inclusion.

Safeguarding Long-Term Wealth

A key advantage of gold loans is that customers retain ownership of their gold. This feature preserves generational wealth while providing necessary liquidity. Poonawalla Fincorp emphasises secure asset handling, ensuring pledged jewelry is stored under stringent safety protocols. Borrowers can redeem their items once the loan is repaid, maintaining their family heirlooms for future generations.

Also read - How Consumer Durable Loans Make Big Purchases Stress Free

Looking Ahead

India’s gold loan market has significant growth potential. Rising rural incomes, increasing gold holdings, and the demand for quick credit during economic uncertainty all point to expanding loan volumes. With new entrants like Poonawalla Fincorp Limited complementing established players such as SBI and HDFC Bank, borrowers stand to benefit from competitive rates, innovative repayment options, and improved access in remote regions.

In a country where gold represents both tradition and financial security, gold loans are more than a credit product—they are a bridge between heritage and opportunity. As lenders refine their offerings, gold loans will continue to play a vital role in empowering individuals and small businesses across India.

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