India’s credit market is witnessing a major transformation in 2025 — from salary-based personal loans to secured lending, particularly gold loans. The recent surge in gold-backed borrowing highlights a deeper shift in how financial institutions evaluate trust and risk.
According to recent financial data, gold loans in India surged by nearly 122% year-on-year, reaching ₹2.94 lakh crore by July 2025. This rapid growth outpaces most other consumer lending categories, including unsecured personal loans and credit cards.
So, what’s driving this change? Let’s explore.
1️⃣ Rising Risk Aversion Among Lenders
With an uncertain job market and fluctuating repayment trends, lenders are becoming more cautious. Secured loans, especially gold-backed ones, offer tangible collateral, reducing default risk and ensuring faster recovery in case of missed payments.
Instead of relying solely on salary slips or credit scores, banks now prefer borrowers who can provide security — a move that balances both trust and risk.
2️⃣ Borrowers’ Preference for Lower Interest Rates
Gold loans typically come with lower interest rates than unsecured personal loans. For example, while a personal loan might carry 12–20% interest, a gold loan can be as low as 7–9%.
Borrowers are realizing that pledging gold not only improves loan approval chances but also saves thousands in interest over time.
3️⃣ Digital Gold Loans: The New Frontier
Platforms and fintech firms like Vizzve Finance are leading the digital revolution in secured lending. With online gold valuation, doorstep collection, and instant disbursal, gold loans have become as convenient as personal loans — sometimes even faster.
This blend of convenience and security is reshaping consumer behavior, making secured credit the smarter choice for many households.
4️⃣ Economic Stability and Gold’s Reliability
Gold has always been considered a safe-haven asset in India. In uncertain times, families turn to their gold reserves for liquidity rather than tapping into unsecured credit. This cultural and financial comfort makes gold-backed loans a preferred borrowing method, especially in rural and semi-urban areas.
5️⃣ The Future of Lending in India
As the Indian economy continues to grow, secured lending is expected to dominate new credit disbursals. Salary-based loans will remain, but their share may shrink as both lenders and borrowers favor collateral-based confidence over uncertain income documentation.
Fintech players like Vizzve Finance are at the forefront of this evolution — simplifying secured credit access and making it more inclusive for millions.
❓ FAQs
1. Why are lenders shifting toward secured loans?
Because secured loans, like gold loans, reduce default risk and ensure better asset recovery for lenders.
2. Is it easier to get a gold loan than a personal loan?
Yes. Gold loans require minimal documentation and are approved faster since they’re backed by collateral.
3. Do secured loans affect my credit score?
Yes, timely repayment of any secured loan — including gold loans — can improve your CIBIL score over time.
4. What makes Vizzve Finance different?
Vizzve Finance offers instant, hassle-free secured loan solutions with transparent terms and quick approvals.
Published on : 4th November
Published by : SMITA
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