New Delhi, September 26, 2026 (Yes Punjab News)
Personal loans are regaining momentum in India and could overtake gold loans as the country’s fastest-growing credit segment, according to a report by UBS Global Research, which described the trend as the “beginning of an unsecured upcycle”.
Personal lending had slowed for about two years following regulatory tightening and concerns over rising borrower leverage. The segment has now started showing signs of recovery, with personal loan growth among non-banking financial companies (NBFCs) accelerating to around 30 per cent year-on-year through August and bank growth reaching 9 per cent. UBS said both figures represented their fastest pace in two years.
Gold loans, meanwhile, expanded sharply during FY26, growing about 50 per cent year-on-year to approximately Rs 18.6 lakh crore. Their share of GDP has risen five-fold since FY19, from around 1 per cent to 5 per cent.
According to the report, the surge in gold-backed borrowing was closely linked to elevated gold prices. As gold prices stabilise, that growth driver is weakening, potentially creating room for personal loans to regain a larger share of unsecured credit.
NBFCs have been particularly aggressive in gold lending. Their share of the segment increased more than six-fold from 3 per cent in FY18 to 20 per cent by August. UBS expects the pace of further market-share gains to moderate as the underlying growth catalyst fades.
Credit-quality trends are also diverging. Thirty-day delinquencies on personal loans declined steadily from 3.5 per cent in June 2024 to 1.8 per cent in August 2026. Gold-loan delinquencies, in contrast, increased from 0.7 per cent in March to 2.6 per cent in August.
The brokerage said even the prospect of higher interest rates was unlikely to reverse the emerging trend. UBS expects a comparatively shallow 50-basis-point rate-hiking cycle by the end of calendar 2026, against the 100-basis-point increase currently priced into derivatives markets.
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