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Consent-driven credit: Why consumer-controlled data is shaping the future of lending

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The global financial system is moving towards stronger data privacy and customer control. People want to know how their data is used and who has access to it. In this changing environment, consent-driven credit is becoming very important.Consent-driven <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/your-credit-history-starts-with-your-first-loan-don-t-get-it-wrong-281775812775936.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="credit">credit </a>means that customers have full control over their financial data, as they can now decide which information to share and with which institution. This approach builds trust and makes lending more transparent.

<h2>Account aggregators powering consent-based lending</h2> In India, this is ably supported by the Account Aggregator (AA) framework. The AA ecosystem enables secure, consent-based data sharing between financial institutions. Customers can share their personal data with lenders in a safe, controlled manner. This improves access to credit, especially for customers with weak credit histories. These borrowers can still get <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="loans">loans </a>by sharing their financial data. This supports financial inclusion by providing access to credit to those who are unserved or underserved.Second, it improves accuracy by allowing <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/why-lenders-value-your-repayment-history-over-your-salary-experts-weigh-in-281775629105337.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="lenders">lenders </a>to access real-time data directly from the source and avoid referring to physical forms or statements. This reduces errors and provides an accurate picture of the borrower's financial situation. Thus, the system builds trust, and customers feel more comfortable when they know that their data is used with permission, with a clear understanding of the purpose of use and control over the period for which the data is accessible. In a short span of time, the Account Aggregator ecosystem in India has scaled rapidly into one of the world’s largest open finance networks. As of 2026, it covers over 999 financial entities across 17 Account Aggregators licensed by the regulator.Today, 955 Financial Information Users (FIU) and 179 Financial Information Providers (FIP) are participating in this ecosystem, supported by a growing base of technology service providers (TSP).There is good adoption of data by the financial institutions through the AA framework. As per the latest report by Sahamati, more than 272 million accounts have been linked, and over 408 million consent requests have been fulfilled, resulting in approximately 265 million monthly data flows. This adoption is also visible in borrowers’ acceptance, which has reached an estimated 80 to 90 million individuals, or about 8 per cent of India’s adult population, which is expected to grow further.The lending ecosystem is already showing tangible financial outcomes, according to Sahamati: account aggregators have enabled loans worth approximately ₹1.6 lakh crore in FY25 and are fostering millions of credit journeys, while also expanding into insurance, wealth management, and personal finance use cases.These trends signal a clear shift from document-based data sharing to a continuous, consent-driven financial data infrastructure that is reshaping how financial services are accessed and delivered in India. Customers can now see what data is being shared, and this gives them confidence and control.

<h2>Why consent-driven data will define the next phase of lending</h2> In the future, consent-driven data for credit underwriting and risk assessment will become the norm. Lenders who adopt this approach early will have a competitive advantage. Instead of collecting &amp; storing large amounts of data offline, which is prone to forgery &amp; delays, lenders can now access this information from its source in real time without concern of tampering.Secure APIs, encryption and strong authentication are essential for protecting data, and lenders are investing in these capabilities to build reliable systems. The shift towards consumer-controlled data is not just about compliance; it is about building a fair and transparent financial system that truly drives the next wave of financial inclusion.Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content. Sachin Seth, Regional Managing Director, CRIF India &amp; South Asia To apply for instant loans upto ₹5 lakh, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

Consent-driven credit is reshaping lending in India by giving consumers control over their financial data through the Account Aggregator framework. This shift is improving credit access, accuracy, and trust, especially for underserved borrowers.

Gold loan vs gold overdraft facility: Here's all you need to know before choosing what works best for you

The value of household gold is nearing $5 trillion, comprising an impressive 65% of non-property wealth in India, a Kotak Institutional Equities report showed. Overall, Indian households hold an average of 25,000-30,000 tonnes of gold, which, when divided across 24 crore census households, is around 100-150 grams per household. At current prices, this is worth ₹15-20 lakh, as per Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment.Experts do advise leveraging household gold assets for returns or as a line of credit, if it only serves an investment purpose and not a use case (weddings, occasions, family jewels). Thus, we explain what a gold loan and a gold overdraft facility are, what they entail, what you get and which is the better choice for those seeking a flexible credit facility from banks and NBFCs.<h2>What is a gold loan?</h2>A <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/gold-loan-portfolio-grows-3-8x-outstanding-surpasses-personal-loans-december-2025-rs-16-lakh-crore-borrowing-ticket-size-281776188921432.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold loan">gold loan</a> is when a borrower's gold items are used as collateral to avail credit from a financial institution (banks, NBFCs, private finance). It is a popular way to gain liquidity from your gold assets due to low processing time and quick disbursement. In case a borrower fails to repay the loan, the pledged gold is taken in lieu of the outstanding loan by the lender.

<h2>How does a gold loan work?</h2>You can approach a financial institution to pledge your gold for a loan. The lender will value the <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-cards/swipe-now-pay-forever-how-credit-card-fees-can-eat-your-gold-gains-281769751081242.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold">gold </a>as per market rate and approve a maximum limit based on the valuation. The amount is disbursed once a loan agreement is signed.The borrower is bound to repay the loan as per pre-determined installments and the pledged gold is returned once the full loan has been repaid.In the event of non-repayment, the lender can sell the pledged gold to cover the loan amount.<h2>What documentation is required for gold loan?</h2><ul><li>Banks and NBFCs usually require KYC compliance from borrowers for identification and address proof.</li><li>You will also need to provide proof of ownership for the gold being pledged — this can be done either through the original purchase receipts; or in case of older or ancestral jewellery or gifts, a declaration stating the ownership.</li></ul><h2>What is a gold overdraft facility?</h2>A gold overdraft (OD) is a flexible credit facility offered by banks and NBFCs, where you can pledge your gold assets as collateral in exchange for a revolving line of credit.

It functions similar to a credit card or bank overdraft, where you are approved for a sanctioned limit based on the market value of your gold assets. Typically, for loans over ₹5 lakh, the facility is capped at 75% of the value of your assets.
<h2>What is the eligibility for gold OD?</h2>
When it comes to eligibility, most banks and financial institutions require identity and address proof, besides the duly filled application form to initiate the process for a gold OD application.
You will also need to be an Indian citizen and be above 18 years of age. You can check full list of requirements with your lender.
<h2>How is gold overdraft different to gold loan?</h2>
When you take a gold loan, you get the entire eligible amount as a lumpsum upfront. However, for gold OD you can withdraw funds as and when required. Further, you are not required to withdraw or use the entire sanctioned amount, and interest is only applicable on the amount you do use.

Gibin John, Senior Investment Strategist, Geojit Investments Limited noted that nowadays, some banks and NBFCs offer a gold overdraft facility instead of a conventional gold loan. “The main benefit of a gold overdraft is that you pledge gold and receive a credit limit. You can withdraw money anytime within this limit, and interest is charged only on the amount actually used and for the period it is used. If you do not require a lump‑sum amount, a gold overdraft is a better option than a traditional gold loan,” he noted.
In terms of the numbers, Sawrikar noted that gold loan rates from major banks currently range from 8.75-9.30% per annum, while gold OD rates are broadly similar though overdraft facilities may carry slightly higher upfront processing charges.
<h2>Gold loan vs gold overdraft: A comparison</h2>
According to Sawrikar, the choice is needs-based. “The decisive advantage of gold OD is how interest is computed,” he said, noting that for a term gold loan under ₹5 lakh, interest accrues on the full amount from day one. But under a gold OD with the same limit, a borrower drawing only ₹2 lakh for three months pays interest only on ₹2 lakh for that period, materially lower total outgo for variable needs.

“The rule of thumb is simple. Gold OD for irregular or fluctuating needs. Term gold loan for a fixed one time requirement, where EMI discipline aids repayment. For most households using gold as an emergency buffer, the OD will produce lower actual interest costs,” he added.

<table>
 <thead>
 <tr>
 <th>Parameter</th>
 <th>Gold Loan Overdraft Facility</th>
 <th>Gold Loan with EMI Option</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td>Disbursement</td>
 <td>Provides a credit limit against pledged gold; withdraw as needed.</td>
 <td>Lump sum amount disbursed upfront based on gold's value.</td>
 </tr>
 <tr>
 <td>Interest Calculation</td>
 <td>Charged only on the amount utilised and for the duration it is used.</td>
 <td>Charged on the entire loan amount from the date of disbursal.</td>
 </tr>
 <tr>
 <td>Repayment Structure</td>
 <td>Flexible; repay as per convenience within the tenure.</td>
 <td>Fixed monthly instalments over a predetermined period.</td>
 </tr>
 <tr>
 <td>Suitability</td>
 <td>Ideal for individuals with fluctuating financial needs or uncertain expenses.</td>
 <td>Suitable for those with a specific, one-time financial requirement.</td>
 </tr>
 <tr>
 <td>Processing Time</td>
 <td>Quick approval due to minimal documentation; funds accessible as needed.</td>
 <td>Slightly longer processing time; entire amount received at once.</td>
 </tr>
 <tr>
 <td>Interest Rates</td>
 <td>May be slightly higher due to the flexible nature of the facility.</td>
 <td>Generally lower, reflecting the structured repayment plan.</td>
 </tr>
 <tr>
 <td>Usage Flexibility</td>
 <td>High; use funds as and when required, up to the credit limit.</td>
 <td>Limited to the lump sum received; any additional funds require a new loan application.</td>
 </tr>
 <tr>
 <td>Prepayment Charges</td>
 <td>Typically none; repay the utilised amount anytime without penalties.</td>
 <td>May have prepayment penalties or charges, depending on the lender's terms.</td>
 </tr>
 <tr>
 <td>Documentation</td>
 <td>Minimal; primarily involves gold appraisal and basic KYC documents.</td>
 <td>Similar documentation required; may include additional forms related to EMI structuring.</td>
 </tr>
 <tr>
 <td>Credit Score Consideration</td>
 <td>Less emphasis on credit score; gold serves as primary security.</td>
 <td>Credit score may be considered to determine eligibility and interest rates.</td>
 </tr>
 <tr>
 <td colspan="3">Source: Aditya Birla Capital&nbsp; Note: The differences above are illustrative. Actual terms vary across banks based on eligibility, income profile, and specific product features.</td>
 </tr>
 </tbody>
</table>

<h2>What are the risks to keep in mind?</h2>
<ul>
 <li>One also needs to keep in mind that facilities like gold loan and gold OD come with charges such as valuation charges, processing fees, penalties in case of delays and renewal fees (for ODs).</li>
 <li>Another consideration is the value of your assets. If gold prices fall or rise, lenders may ask you to revalue the arrangement or ask for top-ups.</li>
</ul>

<ul><li>Gold ODs also typically have shorter terms compared to gold <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="loans">loans </a>and need to be periodically assessed and renewed. For this, you have to be attentive to the repayment dates, deadlines, and fine print related to payment delays, auction clause in case of missed payments or settlement terms for non-repayment.</li><li>Further, there is also the risk of over-borrowing in both options due to easy access and gold price fluctuations could impact how much you can spend. Financial discipline is thus important as the penalties could outweigh the benefits.</li></ul>Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for instant loans upto ₹5 lakh, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

Want to leverage your gold for a line of credit? We explain what gold loan and gold overdraft facility is, what you get you and which is the better choice based on your needs. 

Gold loans are not ‘easy money’ in a volatile market

Driven by soaring global prices and across-the-table lending, the gold loan market has exploded, expanding almost 4 times in just four years. This surge has made gold loans the second-largest retail credit category in India, according to the Gold Loan Landscape Report by TransUnion Cibil in April 2026. With a total stock of ₹16 trillion, gold loans trail only housing loans.Tamil Nadu, Andhra Pradesh, and Karnataka lead in <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/gold-loan-portfolio-grows-3-8x-outstanding-surpasses-personal-loans-december-2025-rs-16-lakh-crore-borrowing-ticket-size-281776188921432.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold loan">gold loan</a> origination, as per the report.Given this, the increase in ticket sizes and higher borrowing capacity, stress signals are starting to emerge. While gold loans have become popular, they could also turn out to be a liability for households, given the risk of margin calls when the value of gold depreciates.

Based on the report, for gold loans taken in the first half of 2025, overall delinquency was 1.1%. The stress is notably higher among large-ticket borrowers, with gold loans exceeding ₹2.5 lakh, as they have a delinquency rate of 1.5%. This is more than double the 0.7% rate seen in those with smaller loans. The story explores some of the risks embedded in gold loans and why you need to be cautious.<h2>How the gold loan books bulged</h2>The primary catalyst behind the gold loan explosion is the spike in the price of the underlying asset. Since March 2023, gold valuations have doubled, expanding the borrowing capacity of Indian households. Bloomberg data on the MCX Gold Index displays that gold prices rose 57% since May 2025, reaching a high of ₹1,76,306 in January 2026. This appreciation has enabled existing borrowers to leverage the same ornaments for significantly higher credit limits.Bhavesh Jain, MD and CEO of TransUnion Cibil, explains the correlation: “One of the critical factors driving gold loan growth is the sharp rise in underlying asset values. There is a direct correlation between the price and the ticket size.” The average ticket size has more than doubled, from ₹90,000 in early 2022 to ₹1.96 lakh by late 2025, according to the report. Beyond valuation, the ‘convenience factor’ has played a significant role. Jain notes that today’s borrower can walk into a credit institution and receive a disbursement ‘literally across the table’.<h2>NBFCs managing liquidity</h2>While public sector undertakings (PSUs) continue to hold the highest share by value, 40% in 2025, non-banking financial companies (NBFCs) have emerged as the aggressive leaders in fresh originations. NBFC disbursement growth reached 189% year-over-year in the October to December 2025 quarter, noted Abhinav Thakur, head of Data and Analytics at Equifax India.Senthil Kumar R., MD and CEO of Nitstone Finserv, attributes this edge to agility. “The turnaround time in the disbursement of gold loans is done within minutes. The documentation is minimal, with repayment flexibility. NBFCs also have a better understanding of informal customers and can tap into the huge potential of tier II and tier III markets,” he explained.NBFC's are able to facilitate repayment flexibility through bullet repayments, interest-only servicing, and part-payments, among others.To manage the liquidity required for such rapid growth, NBFCs utilize a mix of internal funds, commercial bank borrowings, co-lending, and institutional bonds. Thakur noted that Equifax manages liquidity risks by adjusting LTV ratios or raising loan costs for higher-risk borrowers.“Lenders proactively reduce the LTV ratio to create a wider safety cushion against price drops. Using margin money provisions helps protect against market downturns,” Thakur added. He also pointed to hybrid products that combine metal collateral with minimal cash deposits to optimise the cost of funds.<h2>RBI directives withdrawn</h2>The rapid expansion led the Reserve Bank of India (RBI) to introduce stricter regulations in early 2026, though these were later withdrawn. The proposed framework had included a tiered LTV structure. “This would have required lenders to continuously monitor the LTV, including the principal plus interest payable. The call for credit assessment for loans above ₹2.5 lakh was a move to ascertain the repayment capacity of the borrower,” Senthil Kumar noted.“A formal credit assessment for customers availing gold loans over ₹2.5 lakh would have been a welcome move. While it might lead to a slower disbursal process for high-ticket loans, it strengthens the sector by protecting both the customer and the lender,” Thakur said.<h2>Stress signals</h2>There is a growing trend of borrowers taking multiple parallel loans, leading to increased leverage. The average outstanding per borrower has climbed from ₹1.9 lakh to ₹3.1 lakh, as per the Cibil TransUnion report.

The data shows a concerning pattern for stressed borrowers, that gold loans have become the ‘product of last resort’. Defaulting borrowers using gold loans as a last resort are 1.6 times more likely to be cut off from the credit system entirely.<h2>Cushioning the correction</h2>The most significant risk is a correction in <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/gold-loan-vs-gold-overdraft-facility-heres-all-you-need-to-know-before-choosing-what-works-best-for-you-281776260977236.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold">gold </a>prices. Since the valuation of the loan is directly linked to the market price of the precious metal, a drop in prices can trigger a ‘margin call’, requiring borrowers to either prepay a portion of the loan or pledge more gold to maintain the LTV ratio. Especially in March 2026, the prices had dipped over 12% to ₹1,33,513 and a 10% slip in prices over the last two months, according to Bloomberg data on the MCX Gold index.“Whenever gold prices come down, the risk is that the margin gets reduced. Then, either they will sell your gold, or you have to pay the margin,” warns Pankaj Mathpal, founder of Optima Wealth Managers Pvt. Ltd. “When people need money, they borrow without considering this.”Mathpal notes that the biggest danger lies in the psychological trap of thinking gold is an ever-ascending asset. “Most of the time, people say that gold prices don't come down. People consider that gold prices will always go up, similar to inflation, but that is not true, and one should be careful.”<h2>Planner's take</h2>For consumers, a margin call can make gold loans go from ‘easy money’ to a serious financial liability. “For a bank, that loan is an asset; for you, it is a liability,” Mathpal explained. “They try to convince you to take a loan because it's easily available, but you should only go for it when it is really needed. My suggestion is to keep a proper margin. If a bank offers you 70%, borrow less so that if prices drop, you can still manage the situation.”He also draws a hard line on the purpose of borrowing. While essential needs like a child’s education fees make the cut as valid reasons, upgrades can be avoided. He believes the lenders must share the responsibility for safety. “Banks should guide and educate the individual, especially if the borrower is not well-versed in these risks.”

Cibil’s Jain echoes this view, stating, “As the gold loan segment expands, lenders’ priority must be to balance growth with prudence. Collateral strength remains important, but it cannot be the sole criterion for evaluating borrowers.”Amol Joshi, founder of PlanRupee Investment Services, while acknowledging the risk is valid, points out factors that act as cushions for the borrower.“Over a medium to long term, rupee depreciation acts as a support for gold prices in India. While we have seen gold falling globally, these drops are often cushioned over the long period in domestic terms,” Joshi explained. Another existing cushion is that lenders typically don't extend more than 75% LTV, leaving a 25% margin for safety.Amol emphasises the deep emotional attachment Indians have with gold, "<a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/gold-loans-lead-credit-growth-younger-first-time-borrowers-drive-expansion-281775121088801.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="Gold">Gold </a>has a special place in our hearts; it’s an emotional attachment. People don’t take it lightly. In the hierarchy of liquidation, mutual funds and shares go first, then FDs, then insurance. Once all of this is knocked off, then you come to gold.” The responsibility falls on both sides of the table: for lenders to improve borrower education and for consumers to distinguish between an essential lifeline and impulsive money choices.&nbsp; Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for instant loans upto ₹5 lakh, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

The gold loan market has reached a record ₹16 trillion, but rising delinquency rates signal emerging credit stress. As market volatility triggers margin calls, experts warn that over-leveraged borrowers risk financial exclusion if gold prices continue to fluctuate.

Choosing between fixed and floating rates? Here’s what most people get wrong

One of the key decisions when borrowing is whether to opt for a fixed or a floating interest rate.For those who are not aware, let us first understand the key differences between the two.<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-anchor-text="Loans">&nbsp;Loans</a> linked to a fixed rate of interest are those in which the loan EMI remains the same throughout the loan tenure.&nbsp;In floating interest rate loans, the interest rate fluctuates with a benchmark, e.g., the repo rate. As a result, your<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-score/same-rs-10-000-emi-but-one-walks-away-with-rs-55-000-less-here-s-the-catch-281776069751158.html" data-vars-anchor-text="EMI">&nbsp;EMI</a> keeps changing – upward or downward – along with interest rates.These are some of the factors which can influence your choice.

<h2>Fixed vs Floating: What to choose?</h2>I.&nbsp;Tenure of loan: Generally, short-term loans are better off when<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/interest-rate-is-not-the-real-cost-of-a-loan-here-s-what-matters-more-281773926094950.html" data-vars-anchor-text="interest rates">&nbsp;interest rates</a> are fixed. On the other hand, long-term loans, such as home loans, typically have floating interest rates.II.&nbsp;Risk appetite: Those who want predictable loan EMIs prefer to choose a fixed rate of interest, whereas those with a slightly higher risk appetite may go for a floating rate of interest on their loans, especially when they anticipate lower interest rates in the near future.III.&nbsp;Interest rate cycle: Another criterion of choosing one over the other is the current interest rate cycle. When interest rates are on a decline, it is recommended to opt for floating interest rates. Conversely, when interest rates are set to increase in the near future, you could choose fixed interest rates so that you could lock them during the loan's tenure beforehand.IV.&nbsp;Stable income: Another criterion for choosing between fixed and floating interest rates is the stability of your income. If your income is stable, i.e., you receive a fixed salary, you are more likely to go for a fixed EMI, unlike in self-employment or a business, where it is easy to handle fluctuating EMI.V.&nbsp;Long tenure with fixed EMIs: It is also important to mention here that one can keep their loan EMI fixed even after choosing a floating rate of interest.This is done by changing the<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/choosing-the-right-loan-tenure-matters-more-than-you-can-imagine-this-is-why-it-matters-281763540952389.html" data-vars-anchor-text="loan tenure">&nbsp;loan tenure</a> – shorter or longer – after a decrease or increase in interest rates, respectively.

Nevertheless, switching from a fixed to a floating interest rate, and vice versa, is subject to additional charges. RBI rules allow banks to charge a levy when customers switch loans from one category to another.“(Banks)… can levy applicable charges for switching of loans from floating to fixed rate or vice versa and or any other administrative costs incidental to the exercise of the switchover options,” reads an RBI statement as on 10 Jan 2025.Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for loans, visit<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-anchor-text="here">&nbsp;here</a>

One could decide between a fixed and a floating rate of interest on the basis of a few criteria such as the loan tenure, risk appetite, interest rate cycle and stability of income, among others.

Gold loan portfolio grows 3.8x, outstandings surpasses personal loans in December 2025 — What we know

The share of outstanding borrowings from gold loans has surpassed personal loans as of December 2025, with an increasing focus towards repeating gold loan borrowers, according to a report by TransUnion CIBIL.The research titled ‘Gold Loan Landscape Report April 2026’, showed that gold loan portfolio as of December 2025, had outstanding of ₹16.8 lakh crore from around 4.7 crore borrowers; compared to ₹15.4 lakh crore outstanding from around 6.8 crore personal loan borrowers in the same period.“Increase in existing to asset borrowers compared to 2022 shows higher focus on borrowers with existing asset relationship; this has happened on the back of significant increase in repeat <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-cards/swipe-now-pay-forever-how-credit-card-fees-can-eat-your-gold-gains-281769751081242.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold">gold </a>loan borrower funding,” it added.

Further, data showed that gold loan origination volumes have seen a growth of 2.3x whereas in value terms the growth has been 5.1x from March 2022 to December 2025.

<h2>How much share does gold loan have in overall portfolio?</h2>According to the report, share of <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/gold-overdraft-facility-eligibility-limit-compare-gold-loan-liquidity-money-lumpsum-pledge-collateral-all-you-need-know-281775485723396.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="gold">gold </a>loan balances in the overall portfolio has increased 3.8 times from 5.9% in March 2022 to 11.1% in December 2025 which is second only to the housing loan space.It further noted that for non-banking finance companies, this has jumped from 4.3% in March 2022 to 12.6% in December 2025 (8.9x growth), for PSUs from 8.8% to 17.4% (3.8x growth), and for private banks from 4.1% to 5.3% (2.4x growth).

The average portfolio balance (gold loan) per trade has also risen ₹1.93 lakh in December 2025 compared to ₹1.08 lakh in March 2022.

<h2>Gold loan portfolio in India expanding to mainstream</h2>As per the report, gold loans are rapidly expanding as a mainstream secured credit product, with 3.8 times growth in portfolio since March 2022. “There is also an expansion in the profile of borrowers opting for gold loan with new growth regions emerging in recent originations,” it added.It further noted that there is a shift to higher exposure and multiple loans, where borrowers are taking bigger ticket gold loans and more concurrent loans, increasing leverage and risk. The average outstanding per borrower has increased from ₹1.9 lakh to ₹3.1 lakh each; and the average ticket size has more than doubled from around ₹0.9 lakh to nearly ₹2 lakh, it stated.

However, the stress signals are predictable. Wallet concentration, recent delinquency, unsecured exposure, and borrower‑level exposure for loans less than ₹2.5 lakh are “strong forward-risk indicators on the new gold loans”, the report noted.
“Implication of stressed borrowers taking gold loans is clearly showing in the higher credit closure rate, indicating that for a section of stressed borrowers gold loan has become the product of last resort,” TransUnion CIBIL stated.
<h2>What are the policy implications?</h2>
TransUnion CIBIL report suggested the following policy-level checks to counter risk:

<ul><li>Stricter borrower-level loan-to-value (LTV) checks</li><li>Risk-based pricing</li><li>Better cross‑lender exposure visibility</li><li>Monitoring repeat gold loan dependency</li></ul>Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for instant loans upto ₹5 lakh, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

As of December 2025, outstanding gold loan borrowings surpassed personal loans, totaling ₹16.8 lakh crore from 4.7 crore borrowers, as per a TransUnion CIBIL report. It also noted increasing ticket sizes and borrower exposure.

You think longer tenure loans cost more. That’s only half the truth

Suppose you are approved for a home or personal loan. The bank is now offering you two choices: pay it off in 10 years with a higher EMI, or stretch it to 20 years with a much lower EMI. Which one do you pick?For many borrowers, the instinct is to go short, finish the loan faster, pay less interest, and be done. And that logic is not wrong, but it is not always the smartest move either. There are real, practical situations where a longer loan tenure is the better choice.

<h2>Your monthly cash flow matters more than you think</h2>Many people who opt for a shorter loan tenure base their decision on the lower interest paid over the loan’s tenure. But what about the money you needright now, for several things including your child’s school fee, medical emergency, your parents’ needs, or simply building a savings cushion?If a shorter tenure locks up ₹40,000 of your monthly income in EMI, and you barely have anything left, you would be one unexpected expense away from financial stress. A longer tenure significantly reduces that EMI, giving you breathing room every single month.Rohit Patwardhan, Chief Credit Officer, HDB Financial Services, explains, "A longer loan tenure can be chosen when the priority is keeping monthly repayments manageable without putting pressure on day-to-day finances. A longer tenure spreads the repayment over a longer period, lowering the <a class="backlink" target="_blank" href="https://www.livemintmoney.com/loans/personal-loan-emi-calculator?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="EMI">EMI</a> and helping borrowers maintain liquidity for other financial goals or emergencies. From a planning perspective, it works best when the borrower has stable income and prefers flexibility in cash flow, while also having the option to prepay and reduce interest costs over time."<h2>When a longer tenure actually makes sense</h2>1. You're early in your career: If you are in your late 20s or early 30s, your income will likely grow. A longer tenure keeps your current EMI low. As your salary rises over the years, you can always prepay the loan and cut down your interest burden.2. You have other financial goals running in parallel: Saving for your child's education, investing in a SIP, and building an emergency fund. These cannot wait; a longer loan tenure lets you stay on track with everything, rather than sacrificing it all at the altar of a shorter loan.3. Your income is stable but not surplus: Salaried professionals with predictable income, but without large savings, benefit most from longer tenures. You know the money will come in, but you also know there is not much extra. The flexibility of a lower EMI makes financial planning simpler.

<h2>The prepayment advantage</h2>Here's something many borrowers don't fully take advantage of: most <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="loans">loans </a>allow partial prepayment with no penalty (especially floating-rate home loans). This means you can take a 20-year loan, but whenever you get a bonus or a windfall, you can put it toward the principal. That shrinks your tenure and saves interest, without ever locking yourself into a high monthly obligation.At last, a longer loan tenure isn't laziness; it's a strategy. It is choosing flexibility today while keeping the option to accelerate repayment tomorrow. Just make sure you have the discipline to actually use the savings wisely, rather than letting them disappear into lifestyle spending. Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for instant loans upto ₹5 lakh, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

A longer loan tenure may cost more in interest, but it gives you lower EMIs, better cash flow, and the flexibility to manage life and prepay when possible.

You earn well, but debt keeps growing; here’s what you may be missing

It's great to be earning well, but if you think it is a surefire way to a debt-free life, you are mistaken. There are multiple reasons for which high earning individuals may struggle with loans.It could be because they were too careless when raising<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-anchor-text="loans">&nbsp;loans</a>, while lifestyle inflation hit them at the same time. And they were recklessly using credit cards without bothering to clear the bills before the due dates.&nbsp;

<h2>These could be why you struggle with debt despite earning well</h2>1.&nbsp;Poor credit card management: Those earning high incomes are generally entitled to use a high credit limit on their<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-cards" data-vars-anchor-text="credit cards">&nbsp;credit cards</a>. Some of them even carry multiple cards. If they do not clear their bills on time and settle only for the minimum due, it won't be long before they have exorbitant loans to repay.2.&nbsp;Easy access to loan: Those with high income are eligible for almost all sources of credit, including personal loans,&nbsp;credit cards, instant loans, and buy now pay later. This instant access to loans makes them overspend on things which they do not even need at times.3.&nbsp;Social compulsions: At times, high-earning individuals tend to overspend because of social compulsions. People tend to buy expensive items to impress their friends and social media contacts. For instance, they change mobile phones way too frequently and go on luxury trips now and then.&nbsp;4.&nbsp;EMIs over savings: Those earning a high income are vulnerable to taking a larger number of loans than they need. As a result, they use a large chunk of their income in paying&nbsp;<a class="backlink" target="_blank" href="https://www.livemintmoney.com/loans/personal-loan-emi-calculator?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="EMIs">EMIs </a>– sometimes over 50%. And when urgency hits, they borrow more loans because they do not have any substantial savings to rely on.5.&nbsp;Lifestyle inflation: Another related reason is that as their earning grows, they like to upgrade to a bigger house and better car, etc. And most of these are funded by debt. These initial acquisitions lead to high recurring expenses, further aggravating the situation. As a result, despite earning well, these high earners may still be burdened by loans.Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for loan, visit<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-anchor-text="here">&nbsp;here</a>

Those with high income are eligible for almost all sources of credit, including personal loans, credit cards, instant loans and BNPL schemes. This instant access to credit prods them to overspend on things which they do not even need.

ESG data is reshaping India’s credit decisions: What borrowers must know

Traditionally, credit decisions in India have involved assessments of financial statements, collateral requirements, and a healthy repayment history. While these remain critical, a structural shift is underway that is redefining how lenders assess risk.Environmental, Social, and Governance data is no longer just a consideration. It is fast becoming essential to evaluate the creditworthiness of the borrowers. While ESG was considered a “good to have” metric till very recently, it is soon evolving into a “must have,” driven by regulatory guidance, investor expectations, and real-world risk exposure.

<h2>The push from regulation and green finance</h2> The RBI Framework for Acceptance of Green Deposits, effective from June 1, 2023, formalises how banks and NBFCs raise and utilise "green" funds. Let’s understand these terms in detail. "Green Deposits" are the liability-side instrument for raising funds. RBI allows banks to raise green deposits to finance projects like renewable energy, green buildings, and sustainable water management, ensuring funds are channeled into sustainable activities.On the other hand, the Green Credit Program (GCP) is not related to lending but is a separate market-based mechanism launched by the Indian government to incentivise voluntary environmental actions. While the RBI framework focuses on Green Deposits (raising capital), it is part of a broader ecosystem that is the Green Finance Ecosystem. Thus, Green deposits are the "sourcing" side, while the actual lending/investment is termed Green Finance.The framework also clarifies that the projects financed through green deposits can be classified under Priority Sector Lending if they meet specified PSL criteria, thus acting as a form of "credit" incentive for banks to fund green projects. The Reserve Bank of India (RBI) has also encouraged financial institutions to integrate climate-related financial risks into their risk management frameworks. Globally, financial institutions are recognising that non-financial risks, such as climate exposure, labor practices, and governance failures, can materially impact a borrower’s ability to repay. Globally, trade finance has emerged as an important sub-segment within sustainable lending.The International Chamber of Commerce (ICC) has issued ‘Principles for Sustainable Trade Finance’ for voluntary, market-led adoption, reflecting growing recognition of the role of trade finance in supporting sustainable supply chains in October 2024. India is following this trajectory, albeit with its own nuances. &nbsp;

<h2>From backward-looking metrics to future risk signals</h2> Traditional financial metrics are backward-looking; they capture what has already happened to predict future possibilities of default. ESG indicators, on the other hand, help anticipate future disruptions, be it regulatory penalties for environmental violations, reputational damage, or supply chain breakdowns due to poor social practices.In this context, ESG is no longer about values alone; it is about risk intelligence. India’s regulatory work in the recent past has worked toward building an ecosystem that is resilient by reinforcing this transition. While the regulatory framework is still evolving, the direction is clear. As per the RBI’s framework, lenders are expected to integrate ESG considerations into their risk assessment frameworks as well. This guidance is not just for compliance, but it is also to mitigate risk and build systemic resilience.The lending industry is now acknowledging that climate risks can translate into credit risks, especially in agriculture, infrastructure, and manufacturing. And by factoring in ESG data, regulators are effectively future-proofing the financial system. As guidelines become more structured, ESG data will move to a core requirement in <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="loan">loan </a>underwriting very soon.

What this means for MSMEs and the road ahead <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans/from-upi-to-msmes-why-credit-is-the-backbone-of-india-s-economic-transformation-loans-281770020547074.html" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="MSMEs">MSMEs </a>are the backbone of the Indian economy. They drive economic growth through production and employment generation. Yes, due to cost pressures, they often lack the resources to measure and report ESG metrics. While lenders now need ESG data to make informed decisions, a large segment of MSMEs, especially Micro and Small enterprises, are not equipped to provide it.The solution is to support them with scalable ESG evaluation models customised for MSMEs, as well as standardised reporting formats, and digital data capture can bridge this gap in the near future. The MSMEs that adapt early will gain a competitive edge, better access to credit, potentially lower borrowing costs, and stronger relationships with lenders. However, those who ignore ESG may find themselves increasingly facing hurdles to access credit at affordable rates. As ESG gains critical importance, there are concerns around “greenwashing”. Greenwashing is defined as the practice of overstating or misrepresenting sustainability credentials. This can be a critical risk for lenders. Decisions based on inaccurate ESG data can lead to misplaced risk and reputational damage. To mitigate this, banks and financial institutions will begin demanding verified, auditable ESG data, which will lead to technology-driven data capture and standardised scoring mechanisms becoming essential. In the near future, the question will no longer be whether ESG data is required for credit decisions. The real question will be how robust, reliable, and actionable that data is. In this evolving landscape of Indian lending, ESG is not just an add-on; it is becoming the foundation of every high-impact, forward-looking decision.For lenders, this means rethinking underwriting models. For borrowers, especially MSMEs, it means building the capability to measure and communicate ESG performance. And for the broader financial ecosystem, it means embracing transparency and accountability at a deeper level.Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial, legal, or professional advice. While every effort has been made to ensure accuracy, readers should verify details independently and consult relevant professionals before making financial decisions. The views expressed are based on current industry trends and regulatory frameworks, which may change over time. Neither the author nor the publisher is responsible for any decisions based on this content.Sachin Seth, Regional Managing Director, CRIF India &amp; South Asia To apply for instant loans, visit <a class="backlink" target="_blank" href="https://www.livemintmoney.com/money/loan/personal-loan?cta_position=L1" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="here">here</a>

Credit decisions are shifting towards incorporating ESG data as essential for assessing borrower risk. The RBI's new framework encourages banks to integrate ESG factors into lending practices, impacting MSMEs' access to credit and necessitating robust ESG data reporting.

Your credit history starts with your first loan — don’t get it wrong

If you are new to the credit system, what matters the most is your first loan.&nbsp; As soon as you raise your maiden loan, a credit report is created in your name, and gradually your credit score builds around it.It is important to note that your<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-score/why-your-credit-score-matters-in-your-home-loan-journey-281775475102950.html" data-vars-anchor-text="credit behaviour">&nbsp;credit behaviour</a> plays an important role. If you pay your EMIs on time, you build a good credit record. On the other hand, when you skip even a single EMI, it can hurt your credit report. And since this is the only loan you have, there is no positive alternative credit behaviour to offset this, effectively making initial mistakes far more damaging than the later ones.

<h2>How your first loan impacts your credit report</h2>These are some of how your first loan shapes your credit report.1.&nbsp;How lenders perceive: The first loan, if managed well, builds a strong credit profile and indicates to lenders that you can manage your debts pretty well. Conversely, when you have missed repayments on the first loan, lenders would perceive you as someone who is not capable of servicing debt well.2.&nbsp;Credit mix: Your first loan adds to the<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-score/what-is-a-credit-mix-and-how-does-it-improve-your-credit-score-281773041612810.html" data-vars-anchor-text="credit mix">&nbsp;credit mix</a>, a key criterion of a good credit score. A healthy credit mix is a combination of secured and unsecured credit.3.&nbsp;How quickly your score grows: Your first loan decides how quickly your<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/credit-score/why-does-your-credit-score-drop-even-when-you-pay-on-time-281775557008114.html" data-vars-anchor-text="credit score">&nbsp;credit score</a> grows. If managed well, your score can increase quite fast, and when mismanaged, your score can take ages to grow.Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.For all personal finance updates, visit<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance" data-vars-anchor-text="here">&nbsp;here</a>

Your credit behaviour towards your first loan plays an important role. If you pay your EMIs well on time, you build a good credit record. On the other hand, when you skip even a single EMI, it triggers an adverse impact on your report.

Banks won’t approve your loan without these documents. Check the full list

If you are planning to apply for a loan, you must first gather a few documents to make the loan application process seamless.The lender could ask you to provide your<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance/money/sharing-your-otp-or-pan-can-lead-to-fraud-check-how-281775471880378.html" data-vars-anchor-text="PAN">&nbsp;PAN</a> card, Aadhaar number and the past few months' salary slips. Let us understand which documents you need to provide when applying for a loan.

<h2>Key documents required for loan</h2>1.&nbsp;PAN: Permanent Account Number is one of the most important documents required for your loan application. This is important for verifying the applicant's financial identity.2.&nbsp;Aadhaar: This is required for the eKYC. The lender would send an OTP to the phone number linked to the Aadhaar to confirm the identity of the loan applicant.3.&nbsp;Salary proofs: In order to show whether you can repay the loan on time, you need to prove your income by submitting the previous three months' salary slips. The lender could also ask for a bank statement as an additional document for the income proof.

4.&nbsp;Joining letter: Lender could also- at times - ask for the joining letter as evidence of employment. Although it is not a very important document, a salary slip can be requested as additional documentary evidence to prove employment.5.&nbsp;Passport photos: Apart from the documents mentioned above, you will also be required to submit your passport-sized photo.It is important to mention here that these are only indicative documents. The actual documents required for your <a class="backlink" target="_blank" href="https://www.livemintmoney.com/personal-finance/loans" data-vars-page-type="story" data-vars-link-type="Manual" rel="dofollow" data-vars-anchor-text="loan">loan </a>application vary from lender to lender.Disclaimer: MintMoney has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. MintMoney does not promote or encourage taking credit, as it comes with a set of risks, such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.To apply for instant loan, visit<a style="text-decoration:none;" target="_blank" href="https://www.livemintmoney.com/personal-finance" data-vars-anchor-text="here">&nbsp;here</a>&nbsp;

Before you apply for loan, you must have access to a few documents including PAN, aadhaar, salary slips, joining letter and passport photos