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Gold Rate Trends in India - How Is Gold Rate Impacting on Gold Loan

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Author - Neha Wadhwa
 Gold Rate Trends in India - How Is Gold Rate Impacting on Gold Loan

The Covid-19 pandemic has brought about a drastic shift in the people's perception of realising gold as an instrument of credit rather than an instrument of savings. This paradigm shift has led to gold loan demand rising in India. The Reserve Bank of India data also indicates the same phenomenon of rising demand for gold loans to fulfil essential financial expenditure and emergencies. As per these official RBI data, the demand for loan against gold has spiked by 82% since March 2020, and the trend will likely continue.

Let's understand the reasons for the increase in the demand for Gold Loan.

Why has gold loan become a preferable option for borrowers in the current pandemic era?

One of the primary reasons why the demand for the gold loan has increased is the gold rate trends. With the price of gold hitting high in the last few months and borrowers now able to borrow more money on the exact weight of gold and quality, they are switching to gold loan options.

How much gold loan can you avail against your gold?

As per RBI guidelines, Banks & Non-Banking Financial institutions offer gold loan upto 75% of the value of gold. The value of gold is estimated based on the value of gold per gram, which is further evaluated on factors such as purity and gold rate. As of 4th June 2021, the gold rate per 10 grams for 24 Karat Gold & 22 Karat Gold stands at ₹ 49,230 & ₹ 48,230, respectively.

Understanding the Gold Rate Trends & its Impact on Gold Loan in the Current Pandemic Era

The coronavirus-driven steeper global economic downturn recently recorded the highest gold rate in the last four months. However, going by the gold rate trend of 2021, the yellow metal has fallen from January to April and later has gone up in May.

Refer to the below table to see the gold rate trends of 24 K Gold in 2021.




Loan Amount




10 Years

10 Years

Rate of interest



Interest to be paid



Total amount



Monthly EMIs



Here are some other salient features of gold loans ,that have increased the demand for gold loan in the current pandemic era:

  • Unlike many other loan products, you can avail of gold loans with no end-usage restrictions for personal or business needs.
  • You can avail of gold loans at a low rate of interest of upto 75% of the value of the gold. The interest rate on other loan products like personal loans is relatively high, making it difficult to afford.
  • You can easily repay a gold loan with flexible gold loan repayment methods such as bullet repayment, EMI or overdraft scheme.
  • You can avail of a gold loan with minimal documents for identity and address proof.

Thinking about how you can get the best gold loan

You can compare gold loan rates of top banks and gold loan companies from MyLoanCare to get the lowest rate on your gold loan. The process of availing of a gold loan online is more relaxed and requires you to submit minimal documents for a gold loan.

Final Line:

With the gold loan providers, both in the organised and unorganised sectors, expanding their reach in the digital gold loan market, there is a perfect ground for the borrowers to avail loan against the gold. Also, when businesses are shut down, and many people have lost their source of livelihood or face a cut in their income sources, they can easily avail gold loans without any requirement of CIBIL Score or Credit History . Thus, it is no longer a surprise that the yellow metal price hike and online models in the gold loan market have spiked the demand of gold loan borrowers. As per KPMG, India's gold loan market is expected to reach ₹ 4,617 billion by 2022.

About Author

Neha Wadhwa
Neha is a mass communication postgraduate and works here as a Senior Content Writer with a total work experience of 4 years. She is a financial specialist and covers Personal Loan, Home Loan, Loan against Property, Gold Loan and investments such as FD and Savings. Before writing on Financial topics, she also wrote on different genres, primarily humour based lifestyle stories on trending real-life topics.

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