India's consumption loans rise 14.5% in Q1FY26, led by gold loans

India's consumption loans grew 14.5% YoY in Q1FY26 to Rs 105.6 trillion, driven by gold loans, while personal loan growth slowed and credit card originations dropped sharply

India’s consumption loan portfolio clocked 14.5 per cent on year growth to touch ₹105.6 trillion in the first quarter of financial year 2026 (Q1FY26).

 

The spurt was primarily led by gold loans, which surged 34.6 per cent, followed by two-wheeler and auto loans. In contrast, personal loan growth slowed significantly to 8.7 per cent year-on-year (Y-o-Y), according to a report by CRIF High Mark.

 

As of June 2025, gold loans rose 34.6 per cent Y-o-Y to ₹13.4 trillion, with origination value growing 38.4 per cent Y-o-Y. This was attributed to rising gold prices and valuations.

 

Public sector banks led gold loan originations by value, accounting for 51.9 per cent in Q1FY26, while non-banking financial companies (NBFCs) dominated small-ticket gold lending volumes. Asset quality remained resilient, with improving early-stage delinquencies and late-stage stress mainly outside the ₹5 lakh+ ticket segment, the report said.

 

 

Meanwhile, home loans accounted for the largest share of origination in value terms at 52.1 per cent in Q1FY26, driven by elevated home prices in urban markets.

 

Two-wheeler loans, on the other hand, led in penetration at 53.2 per cent, driven by rural demand, followed by personal loans, which comprised 39.5 per cent of origination in value terms value in Q1 FY26, likely reflecting continued demand for small-ticket loans.

 

In the home loan segment, public sector banks significantly increased their market share by value, from 37.6 per cent to 46.2 per cent over the year, driven by growth in big-ticket loans above ₹75 lakh, even as smaller-ticket loans continued to lose share.

 

According to Sachin Seth, chairman, CRIF High Mark, “India’s lending patterns are entering a phase of structural shift. Borrowers are seeking higher-value credit, and lenders are realigning portfolios with sharper risk focus and deeper customer segmentation".

 

Personal loan growth slowed to 8.7 per cent Y-o-Y, reaching ₹14.9 trillion in Q1FY26, amid concerns over rising long-term risks and increased NBFC participation.

 

Origination value rose 9.8 per cent Y-o-Y to ₹2.2 trillion in Q1FY26, largely driven by NBFCs, although average ticket size declined 2.8 per cent Y-o-Y to ₹58,522.

 

The market showed a contrast between very low-ticket and high-ticket originations, both experiencing elevated early-stage delinquencies in NBFCs and PSU banks. However, NBFCs showed improvement in delinquencies, from 2.27 per cent in June 2024 to 2.11 per cent in June 2025.

 

In the credit card segment, outstanding balances grew 12.4 per cent Y-o-Y to ₹3.7 trillion. However, card issuance and new originations declined sharply, down 28 per cent Y-o-Y in Q1FY26 to 40,60,000, due to regulatory tightening and lender caution.

 

Private banks strengthened their dominance, accounting for 75.2 per cent of origination share, despite a drop in absolute volumes. Delinquencies (PAR 1-90) for private banks improved from 5.07 per cent in June 2024 to 4.54 per cent in June 2025.