Gold prices in India have crossed the historic threshold of Rs 1,50,000 per 10 grams for the first time in 2026, fundamentally altering the financial landscape for millions of households that hold gold jewellery and coins passed down through generations. This milestone has quietly expanded borrowing capacity, making gold loans a more attractive option for those previously hesitant due to concerns about loan size or eligibility. Bajaj Finance, one of India’s largest non-banking financial companies, has observed a steady increase in gold loan enquiries as borrowers realise that the same jewellery pledged two or three years ago can now secure a significantly higher loan amount, purely driven by the surge in gold prices.
Higher Gold Prices Translate to Greater Loan Value
The mechanism is straightforward: the gold loan amount is determined by the weight and purity of the pledged gold, multiplied by the prevailing gold rate at the time of assessment. As gold prices rise, the same piece of jewellery becomes more valuable, directly increasing the eligible loan amount for the borrower without any additional paperwork or changes in eligibility criteria. 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 doubling the borrowing capacity from the same asset.
What Remains Unchanged
Despite the sharp movement in gold prices, the process of obtaining a gold loan at Bajaj Finance remains as straightforward as ever. Applicants must be Indian citizens aged between 21 and 80 years. Only one Know Your Customer (KYC) document is required: an Aadhaar card, Voter ID, passport, driving licence, NREGA job card, or a letter from the National Population Register (NPR). Gold jewellery or ornaments with purity between 18 karat and 22 karat are accepted, along with gold coins up to 24 karat. Loan amounts range from Rs 5,000 to Rs 2 crore, with competitive gold loan interest rates per annum. In most cases, disbursement occurs on the same day the application is processed at a branch.
Transparent Valuation Method
Bajaj Finance employs a transparent valuation method: it uses 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 Securities and Exchange Board of India (SEBI)-regulated commodity exchange. This approach 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 from valuation; only the actual gold content is assessed.
A Strategic Use of an Appreciating Asset
Gold stored 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. 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 evaluating their financial options, this is a practical reality worth understanding.
Terms and conditions apply.
About Bajaj Finance Limited
Bajaj Finance Ltd. (BFL), 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 classified as an NBFC-Investment and Credit Company (NBFC-ICC). BFL is engaged in lending and acceptance of deposits, with a diversified portfolio across retail, SMEs, and commercial customers, and a significant presence in both urban and rural India. The company accepts public and corporate deposits and offers a variety of financial services products. With a thirty-five-year history, BFL has become a leading player in the Indian NBFC sector, serving a consolidated franchise of 69.14 million customers. It holds 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 fixed deposit program. Additionally, it has a long-term issuer credit rating of BB+/Positive and a short-term rating of B from S&P Global Ratings. For more information, visit www.bajajfinserv.in.
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