Borrow with monthly cash flows in mind: TransUnion CIBIL's Bhavesh Jain
Gold loans have emerged as one of India's fastest-growing retail credit products, with the outstanding loan book reaching ₹22.5 trillion and 5.5 crore customers as of August 2026, according to the November report by TransUnion CIBIL, a credit information company. As part of the Mint Money Guru series, Bhavesh Jain, MD and CEO of TransUnion CIBIL, highlights how repeat borrowing is shaping the segment, why borrowers should watch their cash flows, and which habits keep credit scores healthy.
How big is the gold loan market now, and have you seen defaults rise?
Gold loans have grown in both volume and value over the last three years, with more people borrowing and an increase in gold prices. As of August 2026, the outstanding book shows it is the second-largest retail credit product in India after mortgages. The 90-plus-day past-due rate is 0.3%, compared with 1.3% across retail credit, as lenders can liquidate the pledged gold in the event of default, limiting potential losses. However, the rate has doubled from 0.16% in March 2026. While it is lower than a year ago, the increase over five months is a trend to watch.
Why would you say borrowers in this segment engage in repeat borrowing, and what are the risks?
It is the biggest emerging trend. Among low-risk borrowers studied, 57% of consumers who took gold loans of ₹2.5 lakh or less took another gold loan within 12 months. The corresponding figure was 54% for loans above ₹2.5 lakh.
Gold loans recorded the highest repeat-origination rates among the liquidity-oriented credit products studied. Additionally, during the quarter ended June, 67% of consumers who originated gold loans already had an existing gold loan in their credit portfolios. Almost 37% of gold loan customers have four or more gold loan accounts. While the research establishes the extent of repeat borrowing, the reasons can vary across consumers.
Repeat originations may also include renewals or top-ups. What is important is that borrowers assess their repayment capacity before taking additional credit, while lenders consider their overall credit exposure and repayment history alongside the value of the pledged gold.
Gold prices fell recently. How does it impact borrowers?
The gold loan book has kept growing even as prices fell, because repeat borrowers keep increasing their exposure. Customers are taking on more, not less. They need to understand the underlying asset against which they are borrowing, as gold prices can fluctuate significantly within a month, a quarter or a year. These price fluctuations are a risk that every retail borrower should factor in before taking a gold loan.
Personal loans growth has drawn a lot of attention from lenders and regulators. What are you seeing in delinquency trends over the last 12 to 18 months?
Our analysis of credit bureau data indicates an improvement in repayment performance over the past year, even as lending activity has increased. We are also seeing improvement in the repayment behaviour of newer borrowers.
While these trends are encouraging, lenders must independently assess a borrower's overall financial position, including existing credit obligations, repayment history and capacity to service additional debt. Consumers, meanwhile, should ensure that monthly repayment commitments remain manageable.
How should a borrower decide between a personal loan, a gold loan and a credit card for a short-term need?
The choice of credit should primarily depend on three factors: the purpose of borrowing, the amount required and the borrower's ability to repay within a defined period. Each product serves different financial requirements, and consumers should understand its costs and repayment terms before making a decision.
A credit card can be useful for short-term purchases, particularly when the consumer can repay the entire outstanding bill by the due date and benefit from the applicable interest-free period. However, carrying forward unpaid balances can result in substantial interest charges.
A personal loan provides access to funds without pledging an asset and typically comes with fixed monthly instalments over an agreed tenure. Consumers should evaluate the interest rate, processing fees and total repayment obligation before opting for one.
A gold loan allows consumers to access funds against gold they already own without selling the asset. The loan amount depends on the valuation of the pledged gold and the lender's applicable loan-to-value limits.
While it provides a secured borrowing option, consumers must understand the repayment structure, interest charges and consequences of default, including the risk of losing the pledged gold. Consumers should compare available options, review the terms and conditions, consider existing financial commitments and borrow only what they can comfortably repay.
What three habits would you tell a borrower to follow in the current environment to keep credit health strong?
First, maintain a consistent repayment history. Whether it is a loan EMI or a credit card bill, paying on time demonstrates responsible credit behaviour. Setting up payment reminders or automatic payments can help avoid missed due dates. Credit card users should also aim to pay their outstanding bills in full rather than consistently relying on minimum payments.
Second, borrow within your repayment capacity. Before taking a new loan, evaluate existing EMIs, credit card dues and other financial commitments. Use credit card limits responsibly and avoid taking on multiple credit obligations within a short period without considering their combined repayment burden.
Third, monitor your credit score and report regularly. This also allows you to identify inaccuracies and raise disputes through the appropriate process. Regular monitoring is particularly important before applying for a major loan, such as a home or vehicle loan.
When a borrower's credit score drops, how does it affect their financial life, and how much does a single missed payment really matter?
A credit score plays an important role in a consumer's financial journey. Its impact is not limited to whether a loan or credit card application is approved. Lenders may also consider a borrower's credit score and report when deciding the amount of credit to offer, the applicable interest rate and other lending terms.
Even a single instance can matter. Repayment history is an important factor in calculating the CIBIL credit Score, and a missed payment reported by a lender can affect a consumer's credit profile. However, there is no fixed number of points by which a score will decline.
The impact depends on the individual's overall credit history, the duration of the delay and other factors reflected in the credit report. A credit score is not permanent. If a consumer misses a payment, the immediate priority should be to clear the overdue amount and ensure subsequent payments are made on time.