Large non-bank financial companies are flagging early signs of repayment stress in parts of the gold-loan market, according to reports citing lenders including Bajaj Finance and Piramal Finance.
The concerns come amid rapid lending growth and questions about borrower leverage, repayment delays and potential defaults. Gold loans are secured by pledged jewellery, but borrowers can still face difficulties if income is disrupted or borrowing costs rise.
What borrowers should consider
Borrowers should understand repayment dates, interest charges, renewal conditions and the consequences of default before taking a secured loan. Lenders and investors will be watching portfolio quality and repayment trends in coming quarters.
