Rising Gold Prices Are Giving Indian Households More Borrowing Power Than Ever Before

Bajaj Finance, one of India's largest non-banking financial companies, has seen steady growth in gold loan enquiries as more borrowers recognise that the same jewellery they pledged two or three years ago can now fetch a significantly higher loan amount — purely because gold prices have moved up.

Higher gold prices mean more value in your hands
The mechanics are straightforward. A gold loan amount is calculated based on the weight and purity of the gold pledged, multiplied by the applicable gold rate on the day of assessment. When gold prices rise, the same piece of jewellery is worth more — and that translates directly into a higher eligible loan amount for the borrower.

For a household with 50 grams of 22 karat gold, the difference between pledging at Rs. 55,000 per 10 grams versus Rs. 95,000 per 10 grams is substantial — nearly double the borrowing capacity from the same asset, with no additional paperwork or change in eligibility criteria.

What has not changed
While gold prices have moved sharply, the process of getting a gold loan at Bajaj Finance remains as straightforward as it has always been. Applicants need to be Indian citizens between 21 and 80 years of age. Only one KYC document is required — an Aadhaar card, Voter ID, passport, driving licence, NREGA job card, or a letter from the NPR. 

Gold jewellery or ornaments between 18 karat and 22 karat purity is accepted. Gold coins up to 24 karat are also eligible. Loan amounts range from Rs. 5,000 to Rs. 2 crore, with low gold loan interest rates per annum.

Disbursement, in most cases, happens on the same day the application is processed at a branch.

How valuation works
Bajaj Finance uses a transparent valuation method — the lower of the previous day's closing price or the 30-day average closing price published by the India Bullion and Jewellers Association (IBJA) or a SEBI-regulated commodity exchange. This protects borrowers from unrealistic valuations during short-term price spikes and ensures consistency across assessments.

Decorative elements such as stones or enamel on jewellery are excluded. Only the actual gold content is assessed.

A considered way to use an appreciating asset
Gold sitting in a locker generates no returns on its own. A gold loan allows households to put that asset to work — funding a medical emergency, a child's education, a business requirement, or any other immediate need — while retaining ownership of the gold itself. Once the loan is repaid, the jewellery is returned in full.

With gold prices at historic highs, the borrowing capacity available against household gold has never been greater. For families across India weighing their financial options, that is a practical reality worth knowing.

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About Bajaj Finance Limited
Bajaj Finance Ltd. (‘BFL’, ‘Bajaj Finance’, or ‘the Company’), a subsidiary of Bajaj Finserv Ltd., is a deposit taking Non-Banking Financial Company (NBFC-D) registered with the Reserve Bank of India (RBI) and is classified as an NBFC-Investment and Credit Company (NBFC-ICC). BFL is engaged in the business of lending and acceptance of deposits. It has a diversified lending portfolio across retail, SMEs, and commercial customers with significant presence in both urban and rural India. It accepts public and corporate deposits and offers a variety of financial services products to its customers. BFL, a thirty-five-year-old enterprise, has now become a leading player in the NBFC sector in India and on a consolidated basis, it has a franchise of 69.14 million customers. BFL has the highest domestic credit rating of AAA/Stable for long-term borrowing, A1+ for short-term borrowing, and CRISIL AAA/Stable & [ICRA]AAA(Stable) for its FD program. It has a long-term issuer credit rating of BB+/Positive and a short-term rating of B by S&P Global ratings.

For more information, visit www.bajajfinserv.in